Augusta Capital managing director Mark Francis is pleased with the group’s annual results, which included a more-than-doubling of net profit and a 34 percent increase in adjusted funds from operations.
After years of planning for a strategic shift away from being a rent collector through real estate investment trusts and listed property trusts to being a property asset manager, Francis saw the result as a major milestone.
“There was probably some skepticism there for while as to whether we could replace that rental income with funds management income, and that’s the key thing to take away from the result, that we’ve absolutely done that, and then some,” Francis said.
Augusta had invested heavily in specialist fund managers and people able to extend its digital services to investors and connect them with property investments.
Staff numbers had grown from six to 40.
“It’s a lot of growth and we’re really lucky now we get very good people,” he said, noting the increasing use of digital platforms to connect investors with assets.
“There’s a launch coming up fairly soon that will add a whole another level to the service that we offer, and take it down that digital route,” Francis said.
The business had changed from being a simple manager of single assets, to offering multiple asset funds in different sectors of the market.
“In the old days it was pretty one dimensional. It was a Warehouse or a Bunnings or a Mitre 10 with a long lease. Now we’re offering opportunities to get into tourism. We’re launching a tourism fund shortly with hotel developments,” he said.
“We do a multi-asset industrial fund, which are doing extremely well, and we’ve got some news coming up in the residential market.
“And then we’ve got our single asset funds, which continue to be a big part of what we do.”
Retail property fund coming
Augusta Capital also announced the acquisition last month of the Albany Lifestyle Centre, a ‘big box’ retail centre in fast-growing Albany area on Auckland’s North Shore.
“Retail is a polarising topic at the moment. We’re seeing a real separation between malls, which seem to be the really unloved part of the market, and the big box retail space, which is still got pretty good support. We definitely think there’s an opportunity in big box retail,” Francis said.
“They’re usually pretty land rich assets, particularly the way we build big boxes with large car parks, and they’ve got plenty of alternative uses,” he said.
Augusta saw the Albany investment of around $90 million as one of the seed assets for a bulky goods retail fund.