Augusta Capital Ltd has unconditionally bought an industrial property in Wellington as a seed asset for a new open-ended industrial fund.
Augusta managing director Mark Francis said on Monday the company had bought the Hub industrial park in Seaview for $44.9 million. It covers 4.06ha at 17 & 25 Toop St, 101-103 & 109-117 Port Rd, Seaview, and has a net lettable area of 32,600m² of warehouse & office. Tenants include Peter Baker Transport, Toll Logistics, Downer, Fujitsu & Jets Transport and the weighted average lease term is 5.7 years.
Recent seismic strengthening was completed to lift all buildings above 70% of new building standard. The purchase price of $44.9 million reflects a 7.46% passing yield following completion of those works.
Settlement date is next Wednesday, 20 December.
Mr Francis said Augusta would fund the acquisition by a mixture of cash reserves & bank debt from ASB.
He said the company was also investigating & undertaking due diligence on several Auckland industrial properties and expected to launch the industrial fund in the New Year with a mixture of Auckland & Wellington stock, but with a weighting towards Auckland.
Augusta expects the fund to initially raise between $50-70 million of equity. Augusta will underwrite $35 million of that and is working with a consortium of high-net-worth private investors to underwrite the balance.
It will be Augusta’s first open-ended unlisted multi-asset fund (as compared to the closed-end Value Add Fund & single-asset funds): “The establishment is consistent with the previously identified strategy to broaden our funds management offerings to appeal to a wider range of investors and to give existing investors more choice, in addition to our typical offerings of single asset syndications. It will also assist in providing further recurring management fee income at a meaningful level.”
Augusta expects the fund’s initial offering to be open by the start of February, with settlement at the end of March.
Attribution: Company release.