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Augusta Capital gets $96m for Akld centre

NZN 14/06/2016 Sophie Boot

Augusta Capital, the listed property investor and fund manager, has sold its Auckland Finance Centre for $96 million, dependent on shareholder approval.

The company said the net sale price represents a 3.8 per cent gain on the current book value of the centre, taking into account $1.16 million capital expenditure it has committed and other sale costs and fees. The planned transaction is staged between October 2016 and April 2019.

"Augusta's current intention is to utilise the net sale proceeds to re-invest into its funds management business," the company said in a statement to the NZX.

"Augusta believes that the staged nature of the transaction provides a timeframe over which the proceeds can be invested in the funds management business, while maintaining a level of recurring income from the finance centre properties, while that transition/investment occurs.

"The sale will create material balance sheet capacity to enable the warehousing of assets for future syndication, greater levels of underwriting with respect to new deals as well as the ability to make a direct investment in new fund initiatives as has been previously signalled to the market."

In May, Augusta Capital lifted annual earnings 17 per cent as it eked out bigger returns from its two segments, with a higher occupancy rate and more syndication deals completed. The property segment delivered $5m of earnings before interest and tax on net revenue of $6.7m while the funds management business posted earnings of $4.8m on revenue of $10.3m.

The firm diversified into funds management last year when it bought KCL Property and Investment Property Titles for a combined $15.4m in cash and scrip, giving it about 165 properties to manage, with some $1.1 billion in funds under management.

The shares last traded at $1.115 and have gained 11.5 per cent this year.

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