Super-sized commercial syndicate hits Auckland
Passive property investors are being pitched the chance to earn above-average dividends through a super-sized commercial property syndicate in Auckland.
Monday, May 11th 2009, 5:00PM
by The Landlord
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.
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