Augusta builds up tourism fund plans
Property investor Augusta Capital has bought a central Queenstown five-star hotel project for $13.95 million to place the development in a new tourism fund.
The price included the land as well as the designs, intellectual property and site works undertaken to date, Augusta Capital said.
The property is the second purchased for the new fund, which is expected to be launched in 2019 with more acquisitions by Augusta Capital signalled.
The seller of the Queenstown site and luxury-hotel plans is American property developer Kevin Carlin, of South Island Investments, who will have a consultative role in the project. He has developed several properties in New Zealand.
Carlin called the hotel project Queenstown Views and costed it last year at $100m.
Augusta said it might progress the hotel development before establishing the new fund.
The site is at 17-19 Man St, which is en route to the resort town’s gondola and offers outstanding views out to the Remarkables, the company said.
The proposed hotel will have five storeys and a basement,
47 studios, nine suites including three corner suites, and a luxurious penthouse.
It will also offer a restaurant, piano bar and cocktail lounge, a
150-guest function room and on-site parking.
Augusta was in discussions with potential hotel operators, with a number expressing interest.
Initial discussions had also been held with potential contractors regarding construction, but a contract would not be let until a hotel operator was secured.
Construction was expected to start by the middle of 2019.
Augusta Capital managing director Mark Francis said announcements about the launch of the tourism fund would be made in the new year.
‘‘Augusta is in the process of finalising due diligence on a collection of exciting opportunities for what will be an unlisted fund.
‘‘Tourism is hugely important to the New Zealand economy, and infrastructure is essential in harnessing the benefits of growth in the sector.
‘‘The fund will invest in existing operating hotels and develop hotels where an appropriate risk-adjusted return can be extracted for investors.’’
Augusta bought another property for the proposed fund two months ago. Augusta Funds Management acquired 54 Cook St in Auckland from Augusta Value Add Fund No.1 Ltd for $16.5m, in a related-party transaction.
Augusta Funds Management would hold the asset and then use the property as a seed asset for a new open-ended tourism fund, the company said in September.
The fund was part of Augusta’s core strategy to diversify its funds management offerings to appeal to a wider range of investors.
Augusta said it expected to raise money for the new fund in the first quarter of 2019.