New Zealand investors have an opportunity to diversify into the Australian commercial property market with a Centuria Capital Group unlisted single-asset fixed-term fund, secured by a NZ$240million (A$224million) office building in Melbourne, Victoria.
The Centuria Government Income Property Fund (CGIPF) will acquire the fully leased 20,191sq m A-grade office building located in the inner Melbourne suburb of Footscray. It has an 11.8-year Weighted Average Lease Expiry (WALE) and 91% of the rental income is derived from the Victorian Government and state-owned entities.
Mark Francis, CEO of Centuria NZ (formerly Augusta), said the offering is an example of how New Zealand investors can benefit from the size and purchasing power of the ASX-200 listed Transtasman platform with approximately $A16.8 billion of assets under management.
Francis said, “The merger of Centuria and Augusta last year enables us to benefit from a larger balance sheet to acquire larger scale assets for our New Zealand property funds as well as provide opportunities for Kiwi investors to diversify into high-quality, institutional-grade Australian funds.”
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The office building, located at 1 McNab Ave, Footscray, was built in 2014 and encompasses nine levels of office accommodation with high-quality tenant fit-outs, four levels of secure parking and benefits from strong sustainability credentials, including 5.5-Star NABERS energy and water ratings and a 5-Star Green Star Rating.
In addition to the strong tenant covenants, all the property’s six leases include fixed annual rental increases of between 3.5% and 4%, which will deliver built-in rental growth.
New Zealand-based investors can participate in the CGIPF opportunity with a minimum investment of A$50,000. Bayleys Real Estate’s Syndication and Investment Products division is marketing the CGIPF offering within New Zealand.
The fund is forecasting an annualised pre-tax distribution return of 5.25% for the 2022 financial year, growing to 5.35% the following year, with monthly payments. Details of the forecast distributions and the risks associated with the investment can be found in the Product Disclosure Statement available at www.centuriainvestments.co.nz.
Jason Huljich, Centuria Capital Group joint CEO, said, “Centuria has a 22-year track record for delivering successful fixed-term unlisted funds. In this low interest rate environment, there is a strong appetite from retail investors, on both sides of the Tasman, who are searching for high-quality investments with compelling yields. This is reflected in the over-subscription of the group’s recent unlisted fundraisings.
“Footscray is benefiting from significant infrastructure investment, expansion of government services and high residential demand. This gentrification is anticipated to double the area’s population by 2041. In short, 1 McNab Ave is a high-quality asset, with strong tenant covenants, positioned within an in-demand neighbourhood.”
The Victorian Government has identified 1 McNab Ave to be the first government work as part of its new government workplace precincts. It is creating five government work hubs for the Victorian Public Service in metropolitan Melbourne areas to enable workers to be closer to their homes. The hubs will accommodate up to 2380 public servants each week.
So far this year, Centuria NZ has completed two major capital raises in New Zealand. The first was for a single-asset fund, which acquired the NZ$178.3 million Visy glass bottling complex in Penrose, Auckland.
Additionally, it raised $80 million for the Augusta Industrial Fund Limited (AIF), which provided balance sheet capacity for further acquisitions including a brand-new large-scale A-grade industrial facility in Auckland, a portfolio of eight Auckland industrial properties with eight-year triple net leases, and a well-located modern Christchurch warehouse providing a seven-year lease.
These acquisitions will increase AIF’s total portfolio value to more NZ$547 million, spread across 21 properties and 52 tenants. A small number of shares in Augusta Industrial Fund Ltd also remain available through Bayleys. Visit www.augustaindustrialfund.co.nz for more information.
- Article supplied by Centuria Capital Group
