Investors offered green credentials, high-flying tenant

Investors are being offered a slice of a new Green Star-rated commercial building in Auckland with high-flying accounting software firm Xero as the anchor tenant.

The investment is being offered by property manager Augusta Funds Management, which has agreed to buy the building and 3846-square-metre freehold corner site it stands on for $116 million.

‘‘The building is being constructed to a five Green Star-rated standard by Mansons, which has built more certified Green Star office premises than any other developer in New Zealand,’’ Augusta managing director Mark Francis said.

Augusta aims to raise $68.5m from investors and take a $54m loan from Westpac to cover the purchase price and establishment costs of the syndication.

It is offering 1370 units at $50,000 each in the Augusta St Georges Bay Road Property Trust.

The trust will own the new commercial property at 96 St Georges Bay Rd, Parnell. The forecast annual return before tax is 7 per cent, to be paid monthly.

Bayleys is the agent for the offering, which closes on September 18.

Augusta Funds Management is a subsidiary of Augusta Capital, an NZX-listed owner and manager of commercial property.

Auckland company Manson TCLM is the property’s developer.

‘‘Mansons also stands behind its work and provides a 10-year expenditure and defects warranty, giving investors peace of mind that there will be no unforeseen capital expenditure,’’ Francis said.

The commercial property has four levels of offices and three ground-floor retail premises, plus two levels of basement parking with space for 177 cars.

Xero is leasing 6005sqm on two levels for 12 years with rights of renewal until 2042. Its lease is secured by a bank guarantee of

$13.5m plus GST.

Its 650 Auckland employees are expected to move into the building in November.

Other tenants include engineering and design consultancy Harrison Grierson on the top floor with a

10-year lease, and liquor chain Independent Liquor on level one, also with a 10-year lease.

Augusta said Mansons had agreed to underwrite the rental costs on the remaining vacant 421sqm of office space on level one and ground-floor space of 146sqm for nine years or until it was tenanted.

The offer by Augusta St Georges Bay Road Property Trust is fully underwritten and will register to be a portfolio investment entity (PIE). A PIE generally pays tax on investment income based on the individual investor’s rate rather than the entity’s tax rate.