Provincia Property Fund managing director Carl Burling announced the Carbine Road capital raising closed over subscribed and settled late last night.
Fund chairman and property stalwart Olly Newland noted with incredulity that the bank and lawyers on all sides worked considerable overtime last night to get the deal through before the end of the week. Olly said he’d never seen anything like it before.
The property at 102A Carbine Road and 4 Gabador Place, Mt Wellington is in three titles with access onto both Carbine Road and Gabador Place, Mt Wellington, total land area of 8,921 square metres and total Net Lettable Area of 5,124 square metres across the three sites.
All three properties carry a prized heavy industry zoning under the Auckland Unitary plan.
The purchase price of $7.1 million results in a 6.1% yield. Provincia asset manager Jack Revill said a registered valuation obtained during the due diligence period came in at $7.93 million, giving investors an immediate equity gain of $830,000.
Revill says the property is under rented and has significant upside. It is fully occupied and split risk across three tenancies.
Another one on the way!
Jack Revill has been hard at work unearthing potential new acquisitions for Provincia, and says he has another under contract already.
The property is located in a prime Auckland industrial precinct. Revill says the site is underdeveloped and has significant upside potential. With a purchase price of circa $10 million, investors have an opportunity to secure one of the 110 share parcels of $50k.
Projected fund returns for the next two years are 6% p.a. pre-tax, with dividends paid quarterly.
Investors will also benefit from any capital appreciation in the share price. In the two years since the fund was established, shares have increased in value +35%.
Foundation investors are now receiving 8.1% return on their original $1.00 per share investment. With the dividend currently set at 6% of the current share price of $1.35, the resulting 8.1 cents per share dividend equates to an 8.1% return on investment for those foundation investors.
With the amount of future value increases due to be realised in coming years as under-rented properties come up for rent reviews or renewals, Revill expects the fund to continue paying 6% dividends on whatever the currently prevailing share price is, even as the share price increases.
If you would like to register an expression of interest in Provincia Property Fund, click here and complete the form.