Augusta buys Castle Rock in Christchurch for $53.75 million
In what is thought to be the largest ever industrial property transaction in the South Island, an Auckland-based property fund has spent $53.75 million buying Castle Rock Business Park in Christchurch.
Auckland-based Augusta Capital Ltd is a large New Zealand and Australian property fund manager with multiple investments in Christchurch.
Castle Rock, in Hillsborough, was an early mover in the business park sector, with the small group of investors establishing the park in the early 2000s. It was built in multiple stages, including three properties added post-earthquake, and now houses 16 tenants.
Hamish Doig, Managing Director of Colliers International in Christchurch, brokered the deal with Industrial Director Sam Staite.
“This is a significant investment from Auckland institutional capital and again demonstrates the confidence in Canterbury," Doig says.
"Of the four bids we received, three were from North Island interests. We have been seeing significantly more interest in Christchurch investments from both private and institutional investors.”
For instance, a private Auckland investor has recently bought a large industrial site in Christchurch, previously owned by T&G Global. The blue chip property attracted $100 million of offers.
Staite says there has been a lot more enquiry for Christchurch investment stock.
“We’ve seen national investors increasingly turning their focus to the Christchurch industrial market, because it’s perceived to offer better investment returns than in Auckland. The market believes there’s a very slim chance of the sector getting out of whack with the market in terms of oversupply.”
Augusta Managing Director Mark Francis says the fund is excited about the purchase.
“This is a substantial industrial property that will be both the first Christchurch based property for the Augusta Industrial Fund and the largest property within that fund.
"The Augusta Industrial Fund currently consists of four properties but, along with the acquisition of Castle Rock, will shortly grow to nine properties. The vendors have developed a great asset since establishment of the business park which we believe has further potential.”
Augusta currently manages seven Christchurch properties across its various managed funds and syndicates with a value of $193.58 million.
This includes Eastgate Shopping Centre, Countdown’s South Island Distribution Centre on Shands Road and the Airways Office and Air Traffic Control Centre on Sir William Pickering Drive, where a new state-of the-art air traffic control centre is currently being built for Airways.
Graham Harris, spokesperson for the investors, says the time is right to hand the business park on.
“I’m the only resident Christchurch director now with the others all living in other parts of New Zealand and having extensive business interests elsewhere. We have very much enjoyed building the park and forming solid relationships with our tenants and we’re confident that Augusta will continue that work.”
Covering 7.95ha at Mary Muller Drive, the low building site coverage of circa 41 per cent allows for further expansion. The Hillsborough area has undergone significant development over the past decade, including several substantial post-earthquake developments.
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