Dixon St building set for IPO
Ian Cassels will test confidence in Wellington’s commercial property market, with the initial public offering of the owner of a large Dixon St building just weeks after the November 14 earthquake.
The Wellington Company, of which Cassels is director, is offering investors shares in TWC Quantum Dixon Ltd, a new company that will buy nearly all of the building at 15-21 Dixon Street in central Wellington.
Projecting a dividend of 9.25 per cent, the company is seeking to raise more than $9 million, with the money-raising exercise brokered by Chris Lee & Partners.
Cassels, whose company will invest $1.75m in the new company, said he was confident the offer would reach its target by the closing date on December 14.
The Wellington Company has raised money from investors in a similar fashion twice before, starting with a building on Boulcott St in 2011.
Cassels said there was already support from investors to buy about two-thirds of the shares, although some were reluctant since the November 14 quake.
‘‘There’s some nervous people who won’t go ahead at this time, people who would like to see two or three months of calm, unseismic activity, but at the same time the building’s insured,’’ Cassels said.
‘‘I’m fairly confident that there will be enough people who like it that we’ll get it away.’’
The building, which Cassels said had passed seismic assessment since the quake, is home to Egmont Street Eatery and is also used by tertiary institution Whitireia. Several floors have been converted into apartments used mainly by students, a market Cassels said was ‘‘extraordinarily strong’’.
The shares will not be traded on a licensed market, TWC Quantum Dixon’s disclosure statement says.
Cassels said he intended to fund further building purchases via similar vehicles, with a view to rolling all the companies together when a consolidated company would be large enough to be traded on the New Zealand Exchange.
Such a move would require the approval of shareholders of each company, Cassels said, but would potentially offer the investors a ‘‘much more liquid’’ asset.