Argosy's $100m capital venture

Argosy is aiming to buy the NZ Post headquarters in Waterloo Quay. Photo / Mark Mitchell

Argosy Property's portfolio will climb to $1.1 billion by early next year if a capital raising of up to $100 million to buy two Wellington buildings is successful.

Chief executive Peter Mence said yesterday the purchase of the landmark office blocks would increase the size of the fund but he also revealed how the timing was out of the company's control.

"The possibility of a leak to the investment community was quite high," he said. "I don't know who it was but if there was a possibility, we were better to go [to market with the deal], and the transactions are both conditional."

Speculation was that a large Wellington investor with a big Argosy stake had found out about the deals.

Argosy has a conditional offer to buy the former Ministry of Defence building at 15 Stout St from Maurice Clark and the NZ Post headquarters in Waterloo Quay from NZ Post.

Both purchases will be backed by long-term state tenancies.

Argosy already owns two buildings by 15 Stout St so getting the third offered management cost efficiencies and other benefits, Mence said.

Argosy's $100 million fund raising was underwritten by First NZ, $80 million being sought in an institutional placement yesterday, with $20 million coming from existing shareholders via a share purchase.

Shareholders will be able to buy parcels from $1000 up to $15,000 in that part of the deal which is due to close in early February.

Argosy is paying $33.2 million for the Stout St building and $60 million for NZ Post, planning to spend $46.6 million and $40 million upgrading the blocks.

The Stout St acquisition is expected to be unconditional in the next week and the NZ Post deal is due to be unconditional by March.