Recently-sold Augusta Capital has struck a $178.3 million deal to buy a Penrose manufacturing and distribution plant leased back to the previous owners on a 20-year term.
Mark Francis - managing director of Augusta now delisted from the NZX and owned by ASX-listed Centuria Capital - announced the deal to buy the Visy Glass plant which that business will lease for the next two decades.
Centuria also announced a A$100m ($106.9m) equity raise to fund the purchase and said it would form a new vehicle to own the plant which would be its "largest single asset unlisted fund".
Visy's plant spans the width of a block between Auckland's Southern Motorway and Great South Rd and Centuria said the purchase "is a good example of the type of transformative transaction Augusta Capital can contemplate with the support of the Centuria balance sheet".
Centuria managed A$9.7 billion of assets but today's deal will take it to move than A$10b.
"I'm stoked about this. It goes against anyone who had their doubts about whether Centuria and Augusta should merge," Francis said.
Augusta has 65 syndicates which owned New Zealand and Australian property.
The Visy deal's purpose was to seed the establishment of a single asset fund and would see the 67,000sq m industrial property return $8m rent a year, rising annually by 3 per cent, Francis said. Augusta will manage the property from its Viaduct headquarters in Auckland.
The Visy property has plant and equipment, raw material storage, hardstand improvements and warehousing on the 8.5ha site.
Mark Francis of Augusta Capital. Photo / Supplied
Francis said the purchase "reflects a new level of horsepower we're now running with, as part of Centuria's ambition to substantially increase the scale, diversity and resilience of our New Zealand portfolio on behalf of investors".
The Augusta business owned by Centuria has many single-asset syndicated investment vehicles.
Visy Glass also has manufacturing plants in Brisbane, Sydney, Melbourne and Adelaide where it makes wine, beer, craft beer, cider, juice, soft drink, spirits, water and food containers.
John McBain, Centuria joint chief executive, said the Auckland purchase followed the recent A$417m acquisition of Telstra's data centre in Victoria.
Centuria had upgraded its operating earnings per share and dividend guidance.
Visy was established in Melbourne in 1948 and is now one of the world's largest privately-owned paper, packaging and recycling companies, operating more than 120 sites throughout Australasia with trading offices in Asia and Europe.
Centuria today went into a trading halt for the A$100m officer. Settlement of the capital raise is expected by November 3.
Site in relation to Auckland CBD. Photo / Supplied by Augusta
An investor presentation was today posted on the ASX which cited the "takeover and integration of Augusta Capital's NZ$1.8b platform".
Centuria said it was well-positioned to take advantage of rising demand for industrial real estate and showed how assets under management had risen by around 34 per cent since 2017.
Centuria's shares have been trading around A$2.29.
In July, Centuria declared its takeover for Augusta unconditional, saying it had acceptance on 65 per cent of the shares. Augusta shareholders got 22c in cash and 0.392 Centuria stapled securities for each of their shares.
An earlier $180m offer by Centuria for Augusta was withdrawn due to the pandemic.
