Augusta buys second property for industrial fund

Managing director Mark Francis. Photo / File

Augusta Capital has bought a second property which it plans to add to an industrial property fund scheduled to launch next year.

The Auckland-based company has unconditionally agreed to buy a 2.37 hectare site in the Auckland suburb of Penrose for $19.1 million, which will be acquired by Augusta's upcoming industrial fund, settling on March 29, it said in a statement.

The industrial property currently houses packaging firm Graphic Packaging International New Zealand, which will sign an eight-year lease and surrender the front of the site. That part of the building will be demolished and redeveloped.

"The unconditional contract on 862 Great South Road demonstrates further momentum for the establishment of the industrial fund," managing director Mark Francis and chief operating officer Guy French-Wright said. "The acquisition also reinforces the previously stated intention for the Fund to be weighted towards the Auckland industrial market."

Augusta agreed to buy an industrial site in Wellington's Seaview for $44.9m as a seed asset for the fund, which is expected to raise between $50m and $70m of equity when it launches in 2018.

The firm is completing due diligence on two more Auckland industrial properties and will provide more details next year when it also firms up the timing for the fund's launch.

The unnamed vendor of the property has agreed to underwrite $12m of shares in the new fund, secured by a right to set off against the purchase price.

Augusta shares last traded at $1.065 and have gained 8.9 per cent this year.