Super-sized commercial syndicate hits Auckland

Augusta Funds Management has established a proportional ownership fund to purchase three hectares of commercial land and buildings in Mount Wellington, worth $25.5 million.

The Augusta syndicate is planning to build 310 individual units, available at $50,000 each. Subscribers may apply for more than one unit.

The syndicate will deliver a proportionate ownership scheme whereby investors are offered the opportunity to purchase a proportion of the registered freehold title in land and buildings.

"The purchase price of the property is $25.5 million, which represents an 8.7% annual rental yield. The purchase price is to be funded by way of approximately 40% of non-recourse prime bank debt and approximately 60% investors' equity," Augusta managing director Mark Francis says.

The property currently has a net rental income of $2.2 million, spread across four tenants, including Repco, Shell, Express Data and McConnell Dowell Constructors.

"The site has a gross let-able area of 20,908 square metres plus 89 car parking bays and a substantial amount of excess land that provides flexibility for expansion of existing tenants or for further development," Francis says.

Augusta has projected a cash return on investors' equity (before tax but after all expenses) in the first year of 10%, based on conservative gearing.

The syndicate is being sold down by Bayleys.