Centuria NZ's Mark Francis outside the company's Viaduct Harbour headquarters. Photo / Jason Oxenham
Centuria NZ's Mark Francis outside the company's Viaduct Harbour headquarters. Photo / Jason Oxenham
Australian-owned Centuria NZ, with $2.6 billion of funds under management, has lowered its investment threshold to attract more people, is taking a new direction into storage and residential markets and repositioning existing properties.
Mark Francis, Viaduct Harbour-based managing director, said investment thresholds were lowered in 2018 from $50,000 to $10,000to get more clients.
“It’s opened up not just retirees with plenty of cash in the bank but a younger audience as well and then via the other end of the spectrum, via the connections in Australia, we now have access to a lot more institutional capital as well,” he said referring to parent company the ASX-listed A$21.1b Centuria Capital Group.
Mark Francis says the business manages about 50 funds. Photo / Centuria NZ
He cited a fund launched late last year, owning 43 College Hill Rd, St Mary’s Bay, sold by Andrew Krukziener’s College Hill Investments to Centuria NZ Value-Add Fund No. 2 LP which has a mortgage to ASB Bank.
That single-asset fund, launched to wholesale investors in November, targets a highly attractive pre-tax 13 per cent internal rate of return per annum running for two years so a combined 26 per cent over 24 months via the managed investment scheme.
The fund wants to raise $23.5m in $100,000 minimum parcels from wholesale or sophisticated investors, buying the building for $21.6m. The offer is “close to being fully subscribed”, a Centuria NZ spokesman said.
That building is being re-purposed from commercial to the expanding self-storage market, including wine storage.
43 College Hill Rd which Centuria bought from an Andrew Krukziener company. Photo / Centuria Capital NZ
The Financial Markets Authority warns against such single-asset syndicated-type funds: “Property syndicates are often advertised as providing regular income, with attractive returns quoted. However, syndicate structures can be complex, there are risks to be aware of, returns are only estimates and you may struggle to get your money out. We strongly advise getting financial advice ahead of investing in a property syndicate.”
Francis says Centuria NZ’s funds are far more likely to be multi-asset, less like the College Hill fund which is what the business had offered in previous years.
Francis cited healthcare, agriculture and industrial funds as holding many properties, not a single asset or building.
Mark Francis says repositioning assets is now part of what Centuria NZ does. Photo / Jason Oxenham
Centuria’s residential swerve is via $1 billion Queenstown plans for Lakeview Taumatea, slugged the “alpine Britomart”, a 10ha ex-camping ground site to be developed in a project with Australia’s Ninety-Four Feet and Britomart Hospitality Group.
Francis hopes for more Queenstown residential schemesand says build-to-rent is of particular interest.
“We’ve got tens of thousands of investors and the group has evolved somewhat, particularly over the last three years when the local business was taken over by the Australian listed business. It allows us to do bigger deals, more diversified, structured deals. We’ve come a long way from the sort of historical single-asset single-tenant style of deal which you saw from us many years ago. These days, we’re far more focused on multi-asset open-ended fund structures and we have also moved away from just big box retail or industrial sheds.”
Plans for the $1b Lakeview Taumata scheme at Queenstown. Photo / Centuria NZ
Some of Centuria NZ’s business includes:
An industrial fund which manages assets valued at $650m;
Management of the $180m NZX-listed Asset Plus;
Management of a $170m healthcare fund;
A $130m diversified property fund;
A $24m agricultural fund.
Asset Plus only owns two properties: the new Munroe Lane building it developed at Albany and the empty office block in the city’s CBD at 35 Graham St but with a deal to settle its sale to Mansons TCLM this November.
All up, Centuria NZ manages 50 schemes including the latest College Hill fund.
In December, the agriculture fund bought New Zealand’s largest cut rose grower, the 7.8ha Blooming Hill near Pukekohe. That business grows around 35 per cent of our roses and 15 per cent of our gerbras.
“The tenant is also in the process of expanding into exotic fruit production with a current crop of papaya fruit underway,” Centuria says. The property is on a 15-year triple net lease, plus one right of renewal of 10 years, it said.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
