Augusta in control after NPT buyout
Real estate fund manager Augusta Capital has completed a $4.5 million management buyout of property investor NPT.
Augusta managing director Mark Francis last year gathered sufficient shareholder support to dismiss NPT’s Christchurchbased directors, and take over the management, culminating in the departure of former NPT chief executive Tony Osborne last week.
Francis and supporting shareholders had argued that NPT’s disappointing performance in recent years was partly because it was too small.
NPT owns property assets, including Christchurch’s Eastgate Mall and three other commercial properties, that are valued at
$133m compared with Augusta’s
$1.8 billion.
Both companies are listed on the New Zealand stock exchange.
A likely future scenario may see NPT wound up and its properties sold, either into syndications or to another investor, although this will require agreement of all shareholders. Augusta holds about 20 per cent.
Eastgate Mall, which is valued at $59m and is located in a lowerspending catchment, has proved a challenging property to lease. It is underpinned by retail tenants The Warehouse and Countdown, and medical and social services.
NPT sold the AA Centre in Auckland last year for $47m.
Augusta’s immediate plan is to address the gap between NPT’s current 58 cents a share, compared with its net tangible asset value of 72 cents a share, based on recent valuations.
Francis said it would do this by addressing underperforming properties, and pursuing acquisition opportunities in the right locations with the opportunity to increase their value.
Meanwhile, Augusta is launching several investments. It makes money from sales and management fees over its own portfolio, and from managing properties in syndicates and funds.
It recently completed the fully subscribed syndication to buy and develop an Airways building in Christchurch. This comes on top of two syndications in Auckland and Brisbane.
Augusta Capital is also launching the Augusta Industrial Fund with a focus on the growth market of Auckland. The plan is to build an asset base of $300m and seek a separate NZX listing.
The entry threshold is $10,000, ‘‘to give a more diverse range of investors an opportunity to participate in professionally managed institutional-grade industrial property’’.