Further Property Investment Opportunities
14 July 2005
St Laurence Funds Management Provides Investors With Further Property Investment Opportunities
St Laurence investment and finance group plans to provide property investors with a number of proportionate ownership scheme property investment opportunities over the next 12 – 18 months.
“Proportionate ownership structures provide the opportunity for people to invest in commercial, industrial or retail properties who either don’t want the risk of owning a property outright or who couldn’t afford to otherwise invest in such properties,” says Shivana Satyanand, chief executive of St Laurence Funds Management.
The most recent of these offerings, which has been fully subscribed, is a North Harbour property on the corner of William Pickering Drive and Omega Street, purchased for $2.2 million. Settlement took place on Friday, 8 July 2005.
The property is currently the site of the Brickhouse bar and restaurant, and a Monier display yard. St Laurence plans to capitalise on the site’s potential by constructing a three level office and carparking building on the part of the site which is currently unoccupied.
Tim Rosenberg, Investment Manager with St Laurence Funds Management, says “this investment provides investors with an initial 7.48% cash return based on the current income stream generated from the property and the opportunity to share in the increased value following construction of a new building, which is planned to begin in late 2008.
“This property appealed to investors who were prepared to accept a lower initial return with the expectation that they will benefit from the increase in value of the property following the construction of an additional office and carpark building, and the resulting increase in income stream generated from the property.”
The investment was structured as a proportionate ownership scheme in order to minimise upfront costs and to pass on the depreciation benefits to investors.
Key features of this investment included: the added value opportunity supported by a feasibility study for a new building; a high profile corner site in an established office location; an existing head lease to an Australasian building products company; no initial bank debt; and an investor’s ability to use depreciation benefits resulting from the proportionate ownership structure of the investment.
St Laurence, which has assets under management of over $600 million, sees continued interest from investors in the proportionate ownership structure. Consequently, they are now actively seeking properties within the $3.0m to $10.0m bracket.
Shivana Satyanand says, “St Laurence, with its proven track record, benefits from a number of ‘off-market’ opportunities; meaning we often have the opportunity to access suitable properties at a good price without having to compete on the open market.
“Essentially we are providing opportunities to investors, through this type of structure, to participate in the ownership of a commercial building without the necessity for outright ownership. Investors can not only diversify their risk but also benefit from our property acquisition and property management experience.”