St Laurence Investors To Receive A 159% Return
St Laurence Investors To Receive A 159% Return On Investment In Viaduct Carpark Proportionate Ownership Scheme
Investors in a St Laurence proportionate ownership scheme stand to receive a 159% return on their investment in the seven level Viaduct Carpark located at 15-17 Sturdee Street, Auckland, following the sale of the property.
St Laurence has entered into a conditional sale of the property, pending investor approval, to Metro Parking for $12 million. The property was purchased in October 2002 for $8,906,700.
St Laurence’s Managing Director Kevin Podmore said, “The price is well in excess of our initial price expectation and of the property’s current valuation. We consider that the sale of the property is in the best interests of investors and, accordingly, recommend that they approve the sale.”
Metro Parking is owned by interests associated with Adrian Burr and Mark Wyborn. Settlement is scheduled for 31 October 2005.
St Laurence established a proportionate ownership scheme to purchase the leasehold interest in the carpark in August 2002. The purchase was funded by $4,350,000 of bank debt and $4,556,700 of investor subscriptions; comprising 1,098 interests of $4,150 each.
After repayment of bank debt and other expenses, investors stand to receive an estimated gross return of over $6,600 per interest, representing an increase in value of nearly $2,500 or 159% on their initial interest. Investors have also received an average cash return of 8.05% per annum over that period.
A special meeting of Viaduct Carpark investors will be held on 18 August to approve the sale of the property and the subsequent liquidation of the direct property investment scheme.
“The strong current demand for property of this nature in the Viaduct vicinity provided an optimum set of circumstances to realise the value of this investment,” Mr Podmore said.
St Laurence became involved with the Viaduct Carpark in late 2002 when a number of financial advisers approached the company on the behalf of clients who had invested in the Viaduct Carpark Limited. The property, which was constructed by Hartner Construction, had been syndicated by Wayne Hartner and associates.
carpark had been performing well below expectations; while
it was servicing the bank debt on the property, it was not
providing the forecast return to investors. A rescue
proposal was developed which saw St Laurence buy the
building at market valuation with the original investors
transferring their existing equity into an interest in the
St Laurence proportionate ownership scheme.
By assuming the management of the property, St Laurence got the business onto a more viable and sustainable footing which increased the value of the property, resulting in the present sale for $12 million.
The Wellington based investment and finance group has offered investors seven proportionate title scheme property investments to date. The most recent of these was a North Harbour commercial property on the corner of William Pickering Drive and Omega Street purchased for $2.2 million, which was settled on 8 July 2005.
“What made that property attractive was the opportunity it afforded for us to add value in that less than half the site is currently unoccupied. We plan to construct a three level office and carparking building on the unused part of the site which, when completed, will substantially increase the value of the property and its associated rental stream,” said Kevin Podmore.
St Laurence, which has assets under management of over $600 million, sees continued interest from investors in proportionate ownership structures, and is actively seeking properties that fulfil their criteria within the $3 million to $10 million bracket.
Of the four St Laurence proportionate ownership schemes that have been established for more than 12 months, the average increase in net asset backing is $1.41 as at 30 June 2005; and the average cash return received by investors in these schemes has been 10.05% per annum.
“St Laurence now has an established track record with proportionate ownership property investments. All the proportionate ownership investments we’ve undertaken to date have provided or are showing an increase in value and have provided cash returns in excess of 8% per annum, and associated depreciation benefits,” Mr Podmore said.