INDEPENDENT NEWS

Asset Plus to buy downtown building from Auckland Council

Published: Tue 30 Apr 2019 12:19 PM
Asset Plus to buy downtown building from Auckland Council for $58M
By Paul McBeth
April 30 (BusinessDesk) - Asset Plus has agreed to buy an Auckland CBD building for $58 million from Auckland Council, but will need shareholder approval for the deal.
The property investor, managed by Augusta Capital, has signed a conditional agreement with the city's local body to buy the building at 35 Graham St with a net lettable area of 9,900 square metres.
The deal is conditional on shareholders approving the deal at a meeting expected to be held in the first two weeks of June. Asset Plus shares last traded at 60 cents, valuing the company at $97.2 million. That's a discount to its net tangible assets of 71 cents, or $114.6 million.
Augusta Capital took over the management of Asset Plus, formerly NPT, last year when it fended off a rival proposal by Kiwi Property Management.
The new manager has been repositioning the company's portfolio - currently three buildings valued at $214.3 million - and has been seeking out potential acquisitions where it can unlock future value.
Asset Plus said today's acquisition meets its value-add strategy, with the purchase price at an initial yield of 6.85 percent and offering the potential to redevelop the site once the council's lease expires two years from settlement.
"A number of key corporate tenants have lease expiries over the coming years which should match well with the timing for redevelopment of the property”, chair Bruce Cotterill said. "Once refurbished, we expect the expansive floor plates and extensive views will be attractive to a number of these tenants. The Augusta team will be pursuing these potential leads immediately."
The acquisition will be funded by a debt facility from Bank of New Zealand and will add to earnings. The property investor's gearing ratio was 8 percent as at Sept. 30, with $10 million drawn of a $70 million facility. Asset Plus later reduced that facility limit to $20 million.
More details will be released in the notice of meeting in mid-May.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

National Backs Businesses With $10k JobStart
By: New Zealand National Party
Government Exempts Some Home Improvements From Costly Consents
By: New Zealand Government
The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards
By: New Zealand Media and Entertainment
ASB Takes The Lead Again With New Low Home Loan Interest Rate
By: ASB Bank
The Problems With Testing And Case Statistics For Covid-19
By: Nathan Hoturoa Gray
Fletcher Building to lay off 1000 staff in New Zealand
By: RNZ
Driving prompt payments to small businesses
By: New Zealand Government
On Why We Should Legally Protect The Right To Work From Home
By: Gordon Campbell
Thousands Of Kiwis Travelling For Queen’s Birthday Weekend
By: Auckland Airport
Understanding 5G Concerns – Expert Q&A;
By: Science Media Centre
Record Monthly Surplus As Imports Dive
By: Statistics New Zealand
Bar reopening night 'much, much quieter'
By: RNZ
New Zealand’s population passes 5 million
By: Statistics New Zealand
Seven Weeks Of Clearing The Air Provides Huge Benefits: Scientist
By: NIWA
Milestone In Cash Flow Support To SMEs
By: New Zealand Government
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media