Augusta Capital Ltd confirmed its intention to establish an industrial property fund on 22 December, when it entered into an agreement for the new fund to unconditionally acquire the property at 862 Great South Rd, Penrose.
Augusta managing director Mark Francis said the fund would acquire the Penrose property for $19.05 million, with settlement set for 29 March.
The company settled the $44.9 million acquisition of its first fund asset, the Hub industrial property at Seaview in Wellington, on 20 December.
The 2.37ha Penrose property is fully occupied by Graphic Packaging International NZ Ltd (formerly known as Colorpak NZ Ltd), which will surrender the front portion of the property and enter into a new 8-year lease for the rear portion (from completion of certain works in the second half of 2018).
Graphic Packaging is ultimately owned by NYSE-listed Graphic Packaging Holding Co, which produces packaging for consumer products companies.
Mr Francis said the vendor (a private individual) was obliged under the sale & purchase agreement to complete a demolition of the front portion of the site. Once that’s done, the front portion presents various development options for the new industrial fund. The vendor has also agreed to underwrite $12 million of shares in the new fund (secured by a right to set off against the purchase price payable).
Mr Francis said the acquisition reinforced Augusta’s intention for the fund to be weighted towards the Auckland industrial market. He said Augusta was completing due diligence & negotiations on a further 2 Auckland properties.
Timing of the public offering for the new fund will be announced in the New Year.
20 December 2017: Augusta settles Hub purchase
13 December 2017: Augusta buys Wellington property as seed for new industrial fund
Attribution: Company release.