In the current environment, demand for commercial and industrial property investment opportunities continues to increase as Kiwis seek greater returns.
Centuria NZ (formerly Augusta Funds Management Limited) has been one of the leaders in helping New Zealanders access quality commercial and industrial assets for the past 20 years.
Their successful Augusta Industrial Fund Limited (Augusta Industrial) recently re-opened for investment, seeking to raise capital to fund the acquisition of a recently-secured industrial property.
Mark Francis, Centuria NZ's CEO, says settlement of this asset will see Augusta Industrial's portfolio increase to 12 strategically selected industrial assets – 10 in Auckland, one each in Wellington and Christchurch.
The investment provides a diversified income stream from 50 tenants, including global and multinational names such as Toll, Downer, Linfox, Repco and Fletcher Steel, says Francis, and investors can participate with as little as $10,000 (rounded down to the nearest whole share).
Shares acquired in this offer are forecast to provide investors with a pre-tax cash distribution of five per cent per annum for the financial period ending March 31 2022, expected to be paid monthly, along with the potential for capital growth.*
Francis says previous investors have already benefitted from capital growth with Augusta Industrial producing a 15 per cent per annum annualised pre-tax total return, comprised of cash distributions and capital growth, since establishment in 2018.**
Centuria NZ, which has approximately NZ$2.2 billion of assets under management, is conservative in its approach to shared property ownership structures.
Investors are being offered the opportunity to purchase shares in Augusta Industrial Fund Limited, which offers the opportunity to invest in a portfolio of strategically selected properties providing both tenant and location diversification within the strongly performing industrial sector of the New Zealand property market.
"At the core of our investment philosophy is providing sustainable and stable monthly cash distributions and protecting and growing investors' equity. The long-term strategic objectives of Augusta Industrial strongly align with this approach," says Francis.
A core purpose of Augusta Industrial's third capital raise is to acquire a brand new, large-scale, architecturally designed, A-grade industrial facility currently under construction in Auckland. Francis says: "The newest addition to Augusta Industrial has already had its valuation increase by over $6m (on an "as if complete" basis) since we contracted to purchase it last year."
Bayleys' Head of Syndication & Investment Products, Mike Houlker, says the offer provides all levels of investors with exposure to the industrial property sector – continuing to out-perform commercial office and retail sectors, a long-term trend seen over the past 15 years.
"There's a wide range of investors who have participated in previous Augusta Industrial capital raises, ranging from those with the minimum $10,000 investment right through to high net worth individuals with a $5 million investment," he says.
"In line with the industrial property sector as a whole, Augusta Industrial has seen strong demand from investors. Augusta Industrial's initial and subsequent equity raises totalled $190m and were both oversubscribed, with many investors missing out."
Cameron Bagrie, a leading economist with over 20 years' experience (including 11 years as Chief Economist at ANZ Bank), says he expects investors will shift their attention to commercial and industrial property sectors now residential property has drawn the ire of the Government and Reserve Bank.
"Low deposit rates continue to drive strong interest in high quality, income-producing investments," he says. "As stated in the Reserve Bank's May Financial Stability Report, strong demand and low levels of new supply have underpinned industrial property values, with vacancy rates remaining near historical lows of around three percent".
Bagrie says he agrees with Reserve Bank comments that favourable conditions within the industrial property sector are likely to continue: "Also of note is that tax deductions for depreciation of commercial and industrial buildings were reinstated in 2020, a benefit for investors."
Centuria NZ's sole shareholder, Centuria Capital (NZ) No.1 Limited, is the cornerstone investor in Augusta Industrial, meaning their interests are aligned with other shareholders. Centuria Capital (NZ) No.1 Limited has provided a firm commitment to subscribe for $8m of shares in the offer, which will maintain its 10 per cent shareholding in Augusta Industrial if the targeted $80m is raised.
The offer is being marketed by Bayleys' Syndication & Investment Products team of Mike Houlker, Samara Phillips, Sarah Prebble and Shirley Leung. Presentations will be held around the country in late May and June outlining the offer.
For a copy of the Product Disclosure Statement for this offer, presentation details and more information visit www.augustaindustrialfund.co.nz.
*Forecast pre-tax cash distribution per annum for shares acquired in this offer. Details of how the forecast pre-tax cash distribution is calculated and the risks associated with this investment can be found in the Product Disclosure Statement at www.augustaindustrialfund.co.nz.
**Calculated from 15 June 2018 to 31 March 2021 based on a $1.00 original issue price, dividends declared during the period and net tangible assets of $1.33 per share as at 31 March 2021.
Augusta Industrial Fund Limited is the issuer of the shares to be issued under the offer to which this advertisement relates. A Product Disclosure Statement for the offer, which sets out the terms and conditions of the offer, is available, and can be obtained by contacting the Bayleys Real Estate agents listed in this advertisement. Nothing in this advertisement constitutes an invitation to subscribe for, or an offer of shares, securities or financial products to any person, in any country, in which it would be unlawful to do so. Terms used in this advertisement have the same meaning as defined in the Product Disclosure Statement, unless the context suggests otherwise. Prospective investors are recommended to seek professional advice from a Financial Adviser, which takes into account their personal circumstances before making an investment decision. The selling agents are not providing personalised advice.