Taurus eyes bigger syndication role

Property syndicator Taurus Management has been granted a licence under the Financial Markets Conduct Act.

Managing director David Kitson said the licence reinforced Taurus’ public credibility.

On the property syndication front, Kitson said Christchurchbased Taurus was eyeing up prospects and had also turned down unsuitable ones.

It would provide opportunities for investors mostly in the South Island, although the company was also looking at a property in the North Island.

The new licence gives the firm wider scope to offer managed investment schemes to the public, in addition to the wholesale market. Taurus is one of two such licence holders in the South Island.

The difference between the wholesale and retail markets is that wholesale usually means a bigger investment parcel to a more restricted pool of investors as defined by legislation.

‘‘We see this as complementary to the larger syndicate managers as the maximum individual property size we will manage is unlikely to be greater than $20 million,’’ Kitson said.

‘‘There are plenty of attractive opportunities in the south, with very good returns and security.

‘‘And when it comes to syndicate investment, size doesn’t necessarily matter – tenant profile, returns and security do.

‘‘The syndicates we offer will always have fewer investors. We know it builds confidence to have personal and direct access to a syndicate manager.’’

In 2011, Taurus took over the scheme management of nine properties from the now liquidated SPI Group, and has almost completed the sell-down of these distressed properties.

The experience had been invaluable, Kitson said, and influenced the decision to keep new syndicates below $20m.

Taurus’s licence was awarded after a 15-month application process. Achieving the licence also meant Taurus would realign its business to ensure Taurus Management’s activities were separate to its sister company, Taurus Group, which offers chartered accountancy and capital-raising expertise.

Through the wholesale market, Taurus recently settled the purchase on nine childcare centres, mostly in the South Island, and is currently undergoing due diligence on a 10th centre.

The syndication will soon own properties with a value of $25m.

More recently the group settled on a 4000-square-metre factory and warehouse property in Dunedin, where a sale and lease-back arrangement gave investors the opportunity to be part of a small boutique syndicate with a single tenant providing monthly cash distributions of 8.5 per cent.

Due diligence is under way on two further properties in Christchurch.