Centuria Acquires 19pc stake in New Zealand’s Augusta Capital
A-REIT’s first international holding
Centuria Capital Ltd, Australia’s rising ASX-listed real estate funds and investment bonds manager, today announced it will acquire 19% of Augusta Capital Limited, a leading New Zealand real estate funds manager, with an opportunity to increase its holdings to 24.99%.
The transaction results from an equity raising being undertaken by Augusta and could see Centuria invest a maximum of AUD $22.3million from cash reserves. Centuria’s post-transaction cash reserves would exceed $120 million.
It is Centuria’s first foray into an international market and a sign of confidence in New Zealand’s commercial real estate sector, with a mid-to-long term outlook.
John McBain, Centuria’s Joint CEO, stated, “We believe Centuria’s investment in Augusta represents a unique opportunity to develop a strong presence in the New Zealand funds management arena. We remain attracted to Augusta’s leading position in New Zealand, its strong distribution platform and its fund origination capability.
“This is a long-term investment in the Augusta management team, led by Mark Francis, and the investment has been arranged with the support of the Augusta board and management team.”
Augusta is undertaking a NZD $45 million equity raising to strengthen its balance sheet and provide capital for new opportunities. The fundraising consists of a $12.4 million Placement and a $32.6 million Entitlement Offer.
Following the Placement and institutional component of the Entitlement Offer, Centuria will acquire an initial 19% interest in Augusta on a fully diluted basis at $0.55 per share. Centuria will also partially sub underwrite the Entitlement Offer under a Sub Underwriting Agreement with two New Zealand investment companies.
The transaction will also see Centuria exercise the right to appoint a Director to Augusta’s Board following the Retail Entitlement Offer on 26 May 2020.
Augusta is one of New Zealand’s leading listed real estate fund managers with NZD $1.8 billion (AUD $1.7 billion) in assets across a range of listed, unlisted and private funds.
Jason Huljich, Centuria’s Joint CEO, said, “Augusta has impressive growth credentials and we believe that, as COVID-19 conditions unwind, we need to look to the future. We believe Australasian markets will provide excellent opportunities for experienced and nimble managers such as Centuria and Augusta.”
Mark Francis, Augusta Capital’s Managing Director, said: “We are delighted to welcome Centuria to our register as a strategic shareholder following completion of the Equity Raise. Their support in the Equity Raise reinforces the confidence that we as the Board and Management team have in the Augusta business model and investment thesis.”
Centuria’s FY20 Operating NPAT guidance is maintained at 11.5cps and FY20 distribution guidance remains 9.7cps.
Centuria retained Moelis Australia Advisory Pty Ltd as sole financial adviser and HWL Ebsworth and Harmos Horton Lusk as legal advisers.
Centuria Capital Group secures a $70.6 million industrial logistics facility in North Rocks, NSW, on behalf of US private investment firm, Starwood Capital’s, Last Mile Logistics Partnership (LMLP).
Centuria Capital Group has successfully exchanged conditional contracts to divest two adjoining industrial facilities located at 114 and 120 Old Pittwater Road, Brookvale NSW, which is anticipated to deliver a forecast 13.8% IRR to the assets’ closed-ended fund investors.