Centuria Lands 19pc Stake in Augusta

ASX-listed Centuria Capital has gone back for a second bite at New Zealand property fund manager Augusta Capital, this time securing 19 per cent of the company.

The sizeable share capture, following the completion of the institutional component of the equity raising at 55 cents per share, marks Centuria's first foray into the international market.

Centuria had hoped to increase the company's exposure to NZ property, lodging a NZ$180 million (A$174.8m) bid for Augusta in January after tapping shareholders for $80 million to fund the acquisition.

In March, as the coronavirus crisis gripped economies globally, Centuria withdrew its buyout offer and muted the deal it had been planning for a “considerable amount of time”.

The trans-Tasman deal is a new direction for Centuria, which is lead by John McBain and Jason Huljich, so far focusing its property investment portfolio on mostly office and industrial assets in Australia.

Under the arrangement, Centuria will collect a a 19 per cent stake with an opportunity to increase its holdings to 24.99 per cent.

Augusta, a property management platform with heavy exposure to the strenghtening Auckland commercial property market, valued the properties under management at NZ$1.8 billion (A$1.7 billion).

Like many firms impacted by the coronavirus outbreak, Augusta, led by Mark Francis, turned to shareholders as market volatility increased.

Prior to the pandemic and global financial crisis, NZX-listed Augusta valued the properties it managed at $2 billion while Centuria holds $7.3 billion of assets under management.

Centuria's reignited its interest in the New Zealand-based firm swiftly after Augusta announced a NZ$45 million equity raise to strengthen its balance sheet and provide capital for growth opportunities.

“Augusta has impressive growth credentials,” Centuria joint chief executive Jason Huljich said.

“We believe that as Covid-19 conditions unwind we need to look to the future and believe Australasian markets will provide excellent opportunities for experienced and nimble managers such as Centuria and Augusta.”

Centuria will fund its acquisition using a maximum of $22.3 million from its cash reserves.

The transaction will also see Centuria appointing a director to Augusta’s board and see the fund manager's post-transaction cash reserves will still exceed $120 million after the transaction.