focus AUGUSTA SHAREHOLDER & INVESTOR NEWS - DECEMBER 2018
COVER STORY
Te Arai Lodge We meet Augusta investors Kathy and Vince Moores to share the labour of love that went into their spectacular lodge north of Auckland.
INSIDE THIS ISSUE
AUSTRALIAN PROPERTY MARKET OVERVIEW
MEET OUR INVESTORS
CALI PRESS CHRISTMAS RECIPE
LAUNCHING EARLY 2019
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PROPERTIES
99%
OCCUPANCY
47
TENANTS
6.5%PA
INITIAL FORECAST PRE-TAX CASH RETURN* PAID MONTHLY
Augusta Industrial Fund Limited is considering making an offer of financial products in New Zealand. No money is currently being sought. No financial products can currently be applied for or acquired. The offer will be made in accordance with the Financial Markets Conduct Act 2013. No indication of interest will involve an obligation or commitment to acquire a financial product. Prospective investors are recommended to seek professional advice from an Authorised Financial Adviser which takes into account their personal circumstances before making an investment decision.
Contents
Inside 4
Auckland
From the MD
6 Financial Results 7
Level 2, Bayleys House 30 Gaunt Street, Wynyard Quarter, Auckland 1010
Pg 13
Our Staff
PO Box 37953, Parnell, Auckland 1151
8 Te Arai Lodge
Pg 15
10 Australian Market Summary
T +64 9 300 6161 F +64 9 300 6162
New Plymouth
12 Green Buildings Reaching New Heights
335 Devon Street East New Plymouth 4312
14 Operational Update
18 Recipe – Christmas Bliss Balls
PO Box 44, New Plymouth 4340
15 Augusta Industrial Fund
18 Key Dates
T +64 6 759 1520 F +64 6 759 1521
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18 Augusta Touch Team
Health & Wellbeing
17 Technology
19 The Last Word
T O U R I S M
FUND COMING SOON
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From the MD
FROM THE MD • Mt Wellington, 510 Mt Wellington Highway, Mt Wellington, Auckland The Augusta Industrial Fund has also agreed to purchase a Christchurch property known as Castle Rock Business Park. This property comprises of 13 buildings leased to 16 tenants on one title.
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s we wind up 2018, it is certainly not a wind down as Augusta staff have been kept busy with a multitude of tasks over the past few months. At the end of November Augusta Capital and Asset Plus both released their interim results announcements for the six months ended the 30 September 2018. INDUSTRIAL As mentioned in the last newsletter, we have been working to bring together a group of new and existing assets to form the second round of acquisitions for the multi-asset Augusta Industrial Fund. Following a series of meetings on the 7th December, I am pleased to advise that scheme investors voted for the sale of the following existing syndicates into the fund: • Albany Highway, 265 Albany Highway, Albany, Auckland • Westend, 114-152 Swanson Road, Henderson, Auckland • Beach Road, 5-21 Beach Road, Auckland
We are looking to launch the second capital raise in February next year, so please keep an eye out for the Product Disclosure Statement. As per the first capital raise, we expect investor interest to be very strong, so make sure you don’t miss out on the opportunity to be involved. RESIDENTIAL We are keeping a very close eye on the residential market as demand continues to outstrip supply. While there are signs that are favouring buyers, such as lower mortgage interest rates, lower selling prices, and higher numbers of consent approvals, the housing shortage which has generally been most prevalent in Auckland has started to spread to other areas such as Wellington, and the supply side problem seems no closer to being solved. The Labour Government appear to be doing all they can to deliver on their priorities of making houses more affordable and cities more liveable through initiatives including amending the law to stop foreign buyers from purchasing existing homes, and the establishment of the new Ministry of Housing and Urban
Development which consolidates Housing New Zealand, its subsidiary HLC and KiwiBuild. While this new Ministry has plans to develop and deliver 100,000 Kiwibuild homes throughout New Zealand, KiwiBuild is still expected to take a very long time to close the supply/demand gap. Therefore, there is widespread opportunity to become involved in residential development as house building activities are forecast to remain at high levels over the coming years. More from us on this in the new year. TOURISM In recent months, several of the “live deals” I have mentioned previously have successfully come to fruition. The first being the settlement of the acquisition of 54 Cook Street, Auckland on the 31 October. An Agreement to Lease has been signed with Jucy Snooze Ltd and the asset will consist of 460 pod back-packers accommodation, ground floor retail and the Jucy Group head office. Most recently, we were pleased to announce the settlement of a land holding at 17-19 Man Street, Queenstown on the 29th November. This site sits immediately above the Queenstown CBD on route to the Queenstown gondola and provides outstanding views out to the Remarkables. Resource consent has been obtained by the vendor to undertake a proposed 5-star boutique hotel development which has been progressed
From the MD
to a level of detailed design. Discussions are also in progress with potential hotel operators and construction contractors, with expectations that construction should commence by the middle of 2019. While exact timing is yet to be determined, we anticipate the launch of the Augusta Tourism Fund to take place in the second quarter of 2019, so please watch this space. As with the Industrial Fund, when the Tourism Fund achieves scale and if market
conditions are suitable, the intention is to list it on the NZX. SUMMARY Clearly the tail-end of 2018 will be remembered for its volatility in global equity markets, but the NZ inc story remains a good one on the global stage and we continue to see strong demand for quality property assets from local and international investors, both private and institutional. As I have said before, we could not achieve what we do without
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the loyalty and support of you, the investors and shareholders, and we thank you for your ongoing commitment to Augusta. We hope that you all have a safe and happy Christmas and look forward to bringing you some new and interesting offers in the new year. As you can probably tell it is geared to be another big year!
MARK FRANCIS Managing Director
A recap of the year and a highlight of achievements are shown in the diagram below:
• 96 St Georges Bay Rd Acquired for $116m, $68.5, of equity raised, offer oversubscribed.
• 4 industrial assets acquired for $112m $75m of equity raised, offer oversubscribed.
• 14 properties divested
• Second round of capital raise poised for first quarter 2019 For a further $175 million of assets.
• Due diligence being undertaken on an Australian investment
• All 5 assets now sold
• 54 Cook Street Acquired for $16.5m in October 2018 to be refurbished. • Queenstown Views Acquired for $14m in November – 5 star hotel to be developed.
• Transition of Asset Plus Management contract complete. Good progress on repositioning existing assets. Looking for first acquisition.
*The Augusta offices will be closed for the holidays from 5.00pm Friday 21st December 2018 until 8.30am Monday 7th January 2019.
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Financial Update
FINANCIAL UPDATE BY SIMON WOOLLAMS, CHIEF FINANCIAL OFFICER
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ugusta has recently released its financial result for the 6 months ended 30 September 2018 and we felt it timely we share elements of that result, how we use the Augusta balance sheet to support the business enabling us to offer Investors opportunities that we have secured. Augusta’s near term strategic operating priorities include: • Launch of sector specific funds to further diversify product offerings – Tourism being the primary focus in the near term; • Single asset vehicle offerings will still be a focus but will be of greater scale as has been seen in recent times; • Growth in existing funds under management, specifically Asset Plus and the Augusta Industrial Fund; • Leverage balance sheet to support underwriting and broader business objectives; • Investment in further IT infrastructure to support growth and customer interaction; • Active asset management in New Zealand and Australia in terms of acquisition, divestment and development opportunities; • Overriding all these priorities is the need to provide Investors and Shareholders with sustainable yields and preservation of growth of equity. The financial capability of a fund manager is a key assessment for any current or prospective investor. The reported equity on the Augusta balance sheet as at 30 September 2018 is $86.7 million,1 while the current market 1
value is approximately $96 million (based on the current share price). This is a strong balance sheet for a fund manager and Augusta has been prudent with respect to capital management initiatives with the aim of creating shareholder wealth over time. Augusta’s income profile has transitioned from a return on direct investments in property to income from funds management sources.
applied to the following to support the growth in the business. • Acquisition or launch of new fund management initiatives; • Warehoused assets – prior to the transfer to a managed fund which assists in controlling the timing of offerings; • Underwriting capability in respect to new offerings or capital raises; and
The managed portfolio value is $1.8 billion and the annualised base management fees derived by Augusta are currently $6.8 million.
• The ability to invest in new products or investments which are managed by Augusta to create an alignment of interests.
Transactional income is linked to a sales, acquisition, leasing, project or development initiative. Such transactions are negotiated and structured with the intention to generate a positive outcome for investors by increasing income or opportunities to increase investor equity. Across such a large portfolio there is a significant level of transactional activity on a recurring basis and in more recent times Augusta has been involved in development opportunities.
A key priority in the near term is the continuing investment in human resource and IT infrastructure to not just support the growth in the business but also actively manage the portfolio to both preserve and grow investor equity.
Augusta’s strategy is to co-invest at least 10% in funds where Augusta is the manager - this demonstrates alignment between shareholders and investors. Augusta is also an underwriter of equity with respect to capital raises and allocates or provisions the balance sheet to cover any commitment. Offeror fees relate to the sourcing and structuring of new initiatives and are charged on the establishment of a new initiative. Following the divestment of the Finance Centre, capital has been released to grow the funds management business. The future balance sheet or capital will be
Augusta will continue to offer single asset vehicles in both New Zealand and Australia but has clearly signaled a strategy to launch new sector specific fund initiatives. These new funds are likely to include some form of development and as they will also be specialised there is further reason for investment in human resource. These new funds will provide further investment opportunity aside from a traditional single asset vehicle and represent a different risk profile as they will be multiasset offerings with long term growth strategies. “We will also continue to invest in human resource to grow Augusta’s own capability in support of our core strategy to create a truly diversified portfolio of assets under management. There are a lot of
The reported value of intangible assets and goodwill reflects historical cost net of any impairment and not market value.
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Our Staff
Continued from Page 6.
opportunities out there right now, but as always we will be prudent in sourcing and structuring the right acquisitions for our growing family of investors.”
investments and the Augusta
We have continued to recruit high calibre personnel to manage your
to manage your investments is
brand and strategy has been key to this recruitment. Customer satisfaction is a primary focus and ensuring we have the right people critical to the future success of
both your investment(s) and that of Augusta. Both the ongoing commitment of our Shareholders & Investors is appreciated and we look forward to sharing further opportunities with you in 2019.
OUR STAFF
Prior to this, I was an Associate Director in the institutional banking client coverage team at Commonwealth Bank of Australia where I focussed on certain industry groups including listed real estate, retirement and retail. Born and bred in Auckland, I grew up in Howick and attended the University of Auckland where I studied a Bachelor of Commerce majoring in Accounting (Hons) and Marketing. Following university I started my career in the tax division at PwC where I completed my Chartered Accountancy designation and gained valuable professional skills and experience. The opportunity at Augusta was attractive for a number of reasons including its history of strong performance, ambition, clear strategy to be NZ’s most diversified real-estate fund manager and recent transactions such as the launch of the Augusta Industrial Fund and acquisition of the Asset Plus management
My role was newly created to manage financial reporting, compliance, tax and treasury management for the Augusta Funds Management portfolio. It’s exciting to join a business in a new role where I feel I can use my experience to make a valuable contribution to Augusta and our stakeholders while continuing to learn and be challenged. Life outside work is pretty busy too, my wife Heather and I have two young children, our nearly three year old daughter Mila and our son Theodore who was born in January this year. When I get time I try to be active and enjoy playing sport including football (the round one), touch rugby, golf and squash. I helped to set up the inaugural Augusta touch team which is a good way to make sure I get to run around at least once a week. I also dabble in DIY now and then which normally ends up providing a good reminder of why I became an accountant rather than a builder.
o ch il dr e n. tw
I joined Augusta in August following Financial Controller roles at Airwork, an aircraft leasing and engineering business, and NZX listed property fund, Property for Industry.
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Financial Controller
contract. It also has a reputation as a fun place to work with a great culture that values relationships. I’m happy to say everything is living up to expectations and spending time with investors at the recent meetings has reinforced this. I look forward to meeting more of you in the future.
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MARK MADIGAN
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KATHRYN SIMPSON
Assistant Asset Manager Kathryn holds a Bachelor of Property and Bachelor of Science in Geography from the University of Auckland. Prior to joining Augusta, Kathryn worked as an Assistant Development Manager at an Auckland based private development company. Kathryn managed the company’s private portfolio and was involved in the management of a number of retail, office and industrial development projects. Kathryn joined Augusta in 2018 as an Assistant Asset Manager in which she is responsible for liaising with tenants, property managers and investors and proactively managing the performance of a portfolio of New Zealand assets.
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COVER STORY Te Arai Lodge
AUGUSTA INVESTORS KATHY AND VINCE MOORES AND THEIR
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laced spectacularly atop an elevated range with incredible views across the Brynderwyn ranges and out to the water is Te Arai Lodge. A labour of love, passion and sheer determination that has seen Vince and Kathy Moores’ vision turned into a stunning reality.
Te Arai Lodge has a very serene and calming feel. The expansive, vaulted ceiling when you first enter frames the unsuppressed views out to the dunes. With the lodge sitting in the forest canopy, you are living amongst the birds, there were a number of times I stopped
The stunning interior of Te Arai Lodge.
mid conversation just to watch Tui’s gliding almost motionless on the rising warm, sea air currents. It wasn’t hard to imagine myself, completely relaxed, sitting with a glass of NZ pinot by the roaring fire by night and relaxing by the stunning 20 metre lap pool, heated to a pleasant 28 degrees by day. Each suite is perfectly appointed with generous spaces, large ensuites and private dining areas. If you enjoy sitting under the stars, you might like the outdoor stone baths, positioned on your own private terrace. The Lodge is surrounded by over 20 acres of ancient podocarp
forest and native bush, Te Arai Lodge encompasses a very unique luxury experience which Vince and Kathy and their three children each play their own role in creating. Kathy brings the garden-to-table philosophy to life for their guests, collecting daily; free range eggs, honey from the hive and the most incredible produce like paw paw, figs, avocados and an array of vegetables and herbs from her organic gardens. Vince, a qualified chef, is influenced by South American Chef, Francis Mallmann, and his various Patagonian methods of barbecuing food. Vince and
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Just over an hour north of Auckland is a small community that sits nestled into rolling, Tuscan-like hills. Te Arai’s literal Maori translation is… beyond the veil, after death. It really does feel like you have left the hustle and bustle of one world and entered into another. The birdsong is symphonic, the air sweet with the scent of Manuka and the pristine, white sand beach of Te Arai could quite possibly be the entry to the ‘other side’, it is that beautiful.
M o o re s
REMARKABLE JOURNEY an
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Te Arai Lodge
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Kathy’s daughter Nicola, who has an impressive resume, has worked throughout Europe as a recipe developer, written several recipe books and presented a travel food series with World Nomads in Spain (and who completed her masters thesis in Italian on the history of food at The University of Bologna in Italy) also brings her own, inspiring flair, to the guests food experience. Vince is a qualified chef and the food has South American influences.
Eldest son Doug is in charge of the website, marketing, social media and new initiatives. He is a qualified yoga instructor, a keen golfer and cyclist, and fitness guru who runs yoga and organic movement classes for guests. Son Harry is a musician, artist, photographer and fly fisherman who offers guests trout guiding experiences around New Zealand and saltwater fly fishing in the local waters. Vince and Kathy always knew at some point in their lives they would embark on a journey where they would bring all their experiences and joint passions together, “we share a love for travel, adventure, meeting new people and sharing, we wanted to create a place where we can return the favour of all the incredible hospitality we have received over the years.”
Like most things in life, the ‘great’ doesn’t always come easy and Vince and Kathy have worked hard to achieve everything they have with Te Arai Lodge.
Like most things in life, the ‘great’ doesn’t always come easy and Vince and Kathy have worked hard to achieve everything they have with Te Arai Lodge. Vince simply put it, “Some days, if you knew what was going to happen, you wouldn’t get out of bed in the morning. You can’t actually create an extraordinary life if you just put in ordinary inputs.” Vince spoke about the beginning of the project very much being akin to the game of monopoly, “we had to sell a lot of the green houses before we could build the big red hotel! When we embarked on this project, we went a long way over budget and had to sell some of our assets. We have invested with what was then KCL, now Augusta, for over 20 years and the model has worked
really well for us. To alleviate the increasing budget pressures we put a number of different units on the market.” Vince remembered at the time feeling apprehensive about the liquidity of the units, he needn’t have been, as he puts it, “Boom!” within a matter of weeks we had multiple offers on all of them. Very good offers, with excellent return on investment. The pressure was on us, and the liquidity really helped. Augusta from a cash flow side of things has been brilliant, they really came through. Within weeks, the money was in the bank. They helped facilitate the expanding budget of the build, we didn’t want to compromise our vision and we didn’t have to.” It’s a good thing too as the final result with what the Moores’ have created with Te Arai Lodge is simply put, quite spectacular. The Lodge was officially opened to guests on the 1st of December 2018, to find out more or book your own Te Arai Lodge experience visit www.tearailodge.co.nz or email Lodge Manager Nicola at enquiries@tearailodge.co.nz focus
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Australian Market Summary
Australian Market Summary Augusta held their Australian annual general meetings in early November 2018. At the lunch time break, our previous Chief Operating Officer, Guy French-Wright who moved to Australia some months ago gave an Australian real estate market address to investors. Many investors have requested a copy of this presentation but for those that already have or are considering Australia to further diversify their portfolio, the following were the key highlights of the presentation:
• Retail landscape changing but nowhere near dead • Land values increased to new levels in most major markets • Heat out of the Sydney and Melbourne housing markets • Royal Commission underway into banking practices • Funding for smaller investors becoming harder to attain • Alternative non-bank lenders now a real feature of market MONITOR CLOSELY • Retail sales for consumer confidence
• Yields at historical lows • Broad demand for assets remains
• Lack of quality investment stock key theme in major markets • Industrial the market darling at present
• Acknowledging all of the above, continue to source well leased assets with strong rental growth capabilities • Accepting that yields have moved in recent years and the time in the property cycle, remain highly discerning in our asset selection • Continue with Brisbane focus where relative value continues to exist over Sydney and Melbourne • Unemployment steady at 6%
• Lending restrictions and continued impacts
• Foreign investment and interest at near record levels
FOCUS FOR AUGUSTA
• QLD GDP growth of 3.7% ahead of national average of 2.6%
• Foreign investment • US Bond Yields • Tenant demand versus supply to ensure remain balanced
• Infrastructure and major projects creating positive sentiment as is evidenced by the significant pipeline of projects below:
Major Projects, Brisbane CBD - Private Sector BRISBANE QUARTER
HOWARD SMITH WHARVES
QUEENS WHARF
BRISBANE LIVE
DEXUS WATERFRONT PRECINCT
$1BN 5,000 JOBS
$110M 2,000 JOBS
$3BN 10,000 JOBS
$2BN 10,000 JOBS
$1.4BN 740 JOBS
2019
2020
2022
2025
2026
Major Projects - Public Sector GATEWAY NORTH UPGRADE
KINGSFORD SMITH DRIVE
BRISBANE METRO
BRUCE HIGHWAY UPGRADE
CROSS RIVER RAIL
$1.143BN 1,000 JOBS
$650M 3,000 JOBS
$940M 7,000 JOBS
$8.5BN 2,000 JOBS
$5.4BN 7,500 JOBS
2018
2019
2022
2023
2024
Australian Opportunity / Cali Press
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NEW AUSTRALIAN OPPORTUNITY – FEBRUARY 2019
BY BRYCE BARNETT, EXECUTIVE DIRECTOR We currently have a property under conditional contract in Brisbane, Australia, that has all the attributes of a sound commercial property investment. A substantial due diligence process is currently underway. To date, we have had strong interest in further investment in Australia from a number of our existing investors, as this will not be a large offering it is intended that we will work closely with our current investor database before this opportunity is marketed to the public. We will be taking early registration of interest in January 2019, with an aim to have an offer ready late February 2019. We look forward to providing more information in due course. If you would like to know more or register your interest please email our Head of Investor Relations, Adelle McBeth adelle@augusta.co.nz.
TENANT STORY
Cali Press
Cali Press NZ Limited, was opened in New Zealand by Shelley Empson and her friend and business partner Chris Monaghan. The inspiration to foster the business in NZ surfaced when Shelley was visiting iconic Bondi Beach, Sydney, and noticed the Cali Press brand offering. Cali Press was providing a bespoke, product offering that Shelley instantly fell in love with, vouching that while in Bondi, she “frequented the cafe daily”. Shelley saw the value in providing simple, healthy options, that
consumers could make a part of their daily routine – to pass by a Cali Press cafe on the way to work, to collect a cold pressed juice and something wholesome and healthy for lunch – as a result, Shelley and Chris contacted the owners of the brand in Australia and requested to launch the first ever Cali Press cafe in New Zealand. Subsequent to successful negotiations with the Australian team, Shelley and Chris now own two Cali cafes; one in Parnell and the other in Auckland CBD. The Auckland CBD cafe is located in the Victoria precinct in the BDO
building, owned by the Augusta managed single asset fund, Building B Graham Street Limited Partnership. We encourage investors to visit the cafe and experience for themselves Cali Press’ healthy lifestyle approach. www.calipress.co.nz
Cali P Bliss ress B Recipalls e See p ag for de e 18 tails.
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Green Buildings
GREEN BUILDINGS
REACHING NEW HEIGHTS BY ANDREW EAGLES, CHIEF EXECUTIVE, NEW ZEALAND GREEN BUILDING COUNCIL
Dozens of enormous, swivelling cranes are conducting a symphony of new buildings rising in the heart of our largest city right now. And these new buildings are trumpeting a tune that Aucklanders like. The majority of the cloud-reaching offices being built downtown are verified, proven, green buildings.
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reen Star is an internationally recognised scheme, run by the New Zealand Green Building Council, which rates the quality and environmental impact of commercial buildings. The New Zealand Green Building Council is a not-forprofit organisation who are passionate advocates for better buildings.
We work alongside politicians, industry and other businesses to bring change. We also run trusted, robust authentication schemes,
such as Green Star, that highlight the many buildings that have proven their healthy, efficient credentials. And we provide education too for hundreds of New Zealanders every year keen to learn about the technical aspects behind better buildings. Hundreds of companies in New Zealand, including Augusta, are members of the Green Building Council. Most of the large office buildings being constructed in the Auckland CBD are now Green Star rated. And the Green Star boom isn’t just happening in Tãmaki Makaurau.
It’s happening across Aotearoa. This is good news for New Zealand businesses, and for New Zealanders. Green Star buildings are more energy efficient, meaning cheaper power bills for their occupants, they produce less construction waste, which is good for ratepayers as it means less rubbish being thrown in landfill, and they have better air quality and daylight, making them healthier more productive places to work for Aucklanders.
Green Buildings
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96 St Georges Bay Road has a 5 green star design rating.
Most of the large office buildings being constructed in the Auckland CBD are now Green Star rated. A Harvard University study has shown that green buildings can boost workers’ productivity by thousands of dollars a year, and employees in buildings with better lighting, ventilation and heat control performed over 25 percent higher in standard cognition tests. Tenants of green workplaces are also reporting significantly lower rates of absenteeism. Green Star rated buildings in New Zealand also have higher occupancy rates than other properties, recent research has revealed, highlighting clear benefits for investors and building owners.
96 St Georges Bay Road.
Green Star buildings make up around 132,000m2 of office space. With over 80 per cent of current commercial constructions being Green Star rated, this will boost the green stock by another 80,000m2. Until last year, the Green Star rating system concentrated primarily on new buildings. But that’s no longer the case. In 2017, we launched Green Star Performance, which was designed, after extensive industry consultation, to be used across New Zealand’s 41,000 existing buildings. Owners and tenants are now able to perform a health and productivity check for any kind of building, including offices, hospitals, industrial units and schools, thanks to Green Star Performance.
33 Broadway also has a 5 green star design rating.
Green Star and Green Star Performance rate buildings from zero stars to six stars. A five star rating indicates New Zealand excellence, and six stars represents world leadership standard. Tenants and owners of Green Star buildings are able to prove genuine green leadership. This is one reason why, from Sydney to San Francisco, China, Singapore and the UK, the green building boom is blossoming. This is having an exponential transformation as fixtures and technologies that used to be seen as premium are now, increasingly, the norm. Green buildings are helping to make New Zealand a healthier, better place, for our businesses, for our health, and for our whãnau. www.nzgbc.org.nz
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Operational Update
OPERATIONAL
UPDATE
BY JOEL LINDSEY, CHIEF OPERATING OFFICER
“To improve is to change; to be perfect is to have changed often” – looking back at my first few months at Augusta, my observation is that this phrase reflects Augusta’s modus operandi as we adapt to changing regulation, financial markets and technology, and as we continue the search for new opportunities for our investors. We see Augusta as the leader in the NZ property funds management industry. The challenge we place upon ourselves to retain this spot is to continuously review, innovate and broaden the range of investments we manage. We are also focussed on how we manage investment risk to ensure your investments remain resilient over time. With such a long period of asset value inflation behind us, the future trend in investment performance will no doubt differ from recent years. Instead of benefiting from broader market yield compression, individual asset performance during the next phase of this cycle will be determined by careful stock selection (property type, sector and quality) and creating addedvalue through active management – both of which Augusta has a proven track record in delivering. The asset and development teams have expanded over the past year. Our investment in people is specifically so that we can deliver to our investors the active management required to deliver strong performance.
Augusta has recently joined the New Zealand Green Building Council so that we can strengthen our sustainable investment credentials. Sustainability is already integrated into the design of our recent office building acquisitions, such as 96 St Georges Bay Rd which has a 5-star ‘NZ Excellence’ Greenstar Design Rating. This is important because major corporate tenants already recognise the benefits of Greenstar ratings – for example, the recent Bayley’s Auckland office occupier survey recorded 69% of occupiers thought occupying a Greenstar rated building would contribute to attracting and retaining better calibre staff. NZ’s leading property developers and investors are also focussed on sustainability, with all recent major Grade-A office developments in Auckland being Greenstar rated. Keeping in close contact with our investor base is embedded in our approach to maintaining our very high level of investor loyalty. We are making a significant investment in a new Client Relationship Management (CRM) system to take advantage of the latest technology. Augusta has been working with Salesforce, the world’s largest CRM system provider, to provide us with one of most modern and sophisticated CRM systems available. Augusta’s investors will see the benefits of this initiative from July next year. Changing technology has had a big impact on commercial
To improve is to change; to be perfect is to have changed often.
Augusta have joined the New Zealand Green Building Council.
property, from retail shopping trends to the way goods are distributed from factory to consumer. One emerging trend that we have observed in the US market is the application of blockchain technology. Blockchain technology enables the creation of security ‘tokens’ that represent an interest in an underlying security, stock or property. As distinct from ‘bitcoin’, which is a virtual currency, a blockchain security token is backed by shares in a legal entity, such as a company, that owns the underlying asset, e.g. a commercial property. These virtual tokens can be traded on an exchange although this is still in its infancy and whether or not these tokens become common practice remains to be seen.
Augusta Industrial Fund
Exciting year ahead for the
Augusta Industrial Fund 01
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We are pleased to announce that the Augusta Industrial Fund has agreed to purchase one Christchurch and four Auckland industrial properties for a total price of approximately $174 million. Once the acquisitions are completed, the gross asset value of the Augusta Industrial Fund will increase to approximately $294 million. The four Auckland industrial properties are owned by existing Augusta managed syndicates who voted earlier this month to approve a sale to the Augusta Industrial Fund. The acquisitions of the Auckland and Christchurch properties are
consistent with the Industrial Fund’s strategy to firstly deliver sustainable and stable returns through both tenant and location diversification, and secondly, to grow the Fund’s gross asset base over the next 2-3 years with a view to a possible NZX Main Board listing in time. The growth of the fund also further evidences the execution of Augusta’s strategy to develop and grow a range of multi asset property funds in order to be New Zealand’s most diverse and respected institutional grade funds management business across multiple sectors in both listed and unlisted platforms.
In order to fund the acquisitions, the Industrial Fund will undertake a second capital raise, with approximately $110 million to be raised. A product disclosure statement is currently being prepared and at this stage is expected to be registered in late January 2019. Further information regarding the Augusta Industrial Fund’s capital raise will be available in January 2019. Settlement is at this stage expected to occur for all five properties on 28 March 2019. Augusta holds a 10% stake in the Industrial Fund and will invest further equity in the capital raising to maintain this holding.
01 12 Brick Street, Henderson 02 12 Paisley Place, Mt Wellington 03 862-880 Great South Road, Penrose 04 The Hub, Seaview, Wellington 05 256 Albany Highway 06 Castle Rock 07 152 Swanson Road 08 5 Beach Road 09 510 Mt Wellington Augusta Industrial Fund Limited is considering making an offer of financial products in New Zealand. No money is currently being sought. No financial products can currently be applied for or acquired. The offer will be made in accordance with the Financial Markets Conduct Act 2013. No indication of interest will involve an obligation or commitment to acquire a financial product. Prospective investors are recommended to seek professional advice from an Authorised Financial Adviser which takes into account their personal circumstances before making an investment decision.
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Health & Wellbeing
STARTING 2019
January can mark a whole lot of amazing things; new perspectives, a fresh start, a set of new goals and commitments, opportunity, hope, energy. The biggest goals all seem to be possible. You have a whole year ahead of you to make things happen. You are (hopefully) refreshed from a bit of a break. “This is the year” you say to yourself. The year to get it done, be on your best form and be ultimately, proud at the end of it. With all of this excitement buzzing around, the beginning of the year can, however, also mark a time of confusion and overwhelm with the simple possibility of accomplishing these landmark goals. The subtle pressure you have unknowingly put on yourself starts to creep in. Ideas are buzzing around your head and you are so energised by what’s possible that actually getting it all straight in your mind feels challenging; where do you start? What IS the biggest priority? Do you have the skills, the resources, the people, the time to make it all happen? And, to make it happen the way you envisaged? I certainly have this type of excitement at the beginning of the year. I buy a new planner, get my life sorted, set some big goals and then as we creep into February I am already starting to wonder if this will all be possible. Suddenly, life, has got in the way. When I
finally find a quiet few hours, take a deep breath or 7 and pull out some blank paper I start on the following process: 1. MAKE TIME TO PLAN If you want to make things possible you have to plan and to plan you need quiet, focused thinking time. Find a spot you love, perhaps it feels inspiring. A local coffee shop perhaps or a garden or even a nice room in your house if you have one that you love (and can get some peace in). 2. CONTEXT I harp on about context all the time – because it works. Know what your context (single decision-making word / focus point) is and base your decisions for the year around that. Or, at least for the time period in which it serves you. Can you really start that second business when your context is ‘calm’? Should you be inviting guests over all the time when your context is ‘family’? What about ignoring any planning time when your context is ‘structure’? Make sure you are using it to determine your decisions. 3. LOOK LONG-TERM, THEN COME BACK TO TODAY What is it you want to be able to say at the end of the year? Perhaps you even know in 2-4
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We wanted to give our readers some valuable tools in how to approach setting and achieving your goals for 2019. We spoke with Alex Davids – a highly regarded performance and energy coach. Alex is a director and founding partner of Next Evolution Performance (NEP) – a global high-performance coaching business.
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years what you might want to be proud of. Start there. Then, work backwards and breakdown what needs to be done into bite-sized chunks so that you can feel really good when you accomplish a piece of the puzzle. It’s important to stay flexible too. Things change, including your perspective. Be bold and re-adjust your position when things shift around you. 4. BUILD A TIMELINE BASED ON ENERGY Take those bite-sized goals and start placing them in a large calendar that allows you to see the whole year on one page. Be honest and add all your key personal dates too – holidays, birthdays, visitors etc. This way you can look at the year from an energy-perspective. Does it look comfortable? Can you see times that might leave you feeling burnt-out? What can you do to make this more workable and energising for you and your loved ones. Remember, you can accomplish amazing things. Make it real for yourself by taking the time to plan. For further information or to make a personal enquiry you can contact Alex via email adavids@ neperform.com or visit www. nextevolutionperformance.com
Technology
KEEPING YOUR DIGITAL FRONT DOOR LOCKED BY BRENDAN CLOUGH, IT MANAGER Why does the strength of our passwords matter, and what should we be doing about it? Take a moment to imagine living in a nice townhouse in a good area. Where, regardless of how lovely your neighbourhood, with its neatly manicured lawns and friendly neighbours, each time you leave, you close the windows and lock the front door. In many ways an example of the conscientious home-owner, loved by insurance companies. Now taking this analogy one step further, imagine at a handful of places you had to leave a copy of your key and address so that different people could let themselves in to complete some service for you. Perhaps as an example, a florist who needed access to stage your living room for the Christmas party you were hosting that evening. After a while, that single key now replicated, has been spread among several services, making it vastly easier to steal and use to break into your piece of paradise. Now the above seems daft, doesn’t it? None of us would allow it to occur, right? However, this analogy (while a little abstract) sums up how the typical person uses passwords, with a single key for accessing every account for email, Facebook, online banking, and more. In addition, we often use simple short passwords, to make it easier for everyone involved; ourselves, our spouse, a
brother (that just needed access that one time) and in turn, the stranger sitting half-way across the world. With stories of large account breaches becoming a more common occurrence, we need to get serious about protecting our online accounts. In this digital age, our passwords typically are our protection, our first line of defence against internet ‘villains’. While an imperfect security solution, to begin with, employing a few essential practices can go a longway in protecting yourself. 1. ONE PASSWORD = ONE ACCOUNT – THE ONE COMMAND TO RULE THEM ALL One of the most important practices is to never re-use the same password over multiple accounts. That way, if a hack does occur and your password is compromised, only one account is affected. 2. GO LONG – LONG PASSWORDS ARE SAFER The general rule is the longer the password, the safer it will be. A good start is at least eight characters, but for sensitive accounts such as a bank account, extend the password. 3. ORIGINAL CONTENT ONLY – BE UNIQUE Avoid passwords that are common choices (i.e., 123456, Password) or passwords that reference personal details
(i.e., if you were born in 1965 and had a wife called Sally, try something different to iLoveSally1965). The more removed from your details, the better. 4. s3cu_re_Passw^rds – SALTING PASSWORDS Passwords, like food, often need a pinch of salt. Spicing up passwords with numbers, capital letters and symbols (@, #, !, etc) can add additional complexity to our front door keys. If you choose to substitute symbols for letters, make sure it isn’t common “misspellings”, such as replacing “a” with “@” or “i” with “1” or “!”. Considering adding an underscore ( _ ) halfway through a word. 5. SHARING IS NOT CARING – KEEP YOUR PASSWORD TO YOURSELF Don’t be too social, be careful what you share and who you share it with. Either ‘lending’ your password to others or leaving your password in plain sight could allow someone to side step any effort put in to secure your digital identities. Getting into good password habits can significantly improve the strength of the keys to your digital identity. This will give you a leg up in the wild west that the internet can sometimes become, so that should one of your accounts be compromised without your knowledge, a hacker won’t gain the keys to your whole kingdom.
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Recipe
Cali Christmas Bliss Balls
INGREDIENTS Makes 32-33 350g almonds
TO COAT
350g walnuts
250g coconut oil
150g coconut
150g cacao
20g cinnamon
100g maple syrup
Zest of 4 oranges
Pinch of salt
Juice of 2 oranges 20ml Maple syrup 220g dates, pitted
METHOD 1. Place almonds, walnuts, coconut, cinnamon, orange, maple syrup in a food processor and blitz to form a thick paste, adding in the dates last. 2. Gently mix in cacao nibs with a wooden spoon. 3. Roll into small balls, about 3cm diameter. 4. Place coating ingredients into blender and mix until smooth and not too runny. 5. Dip the tops of the bliss balls into the chocolate coating. 6. Place on a lined tray in the fridge for 1 hour or until set. Store in an airtight container in the fridge for up to 2 weeks. Recipe kindly supplied by Cali Press, bliss balls are also available instore for purchase from either store locations; City Central, 2 Graham Street, Auckland and Parnell, 287 Parnell Road, Auckland. calipress.co.nz.
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A promising start to the season for the Augusta touch team after a successful win against The City Mission. Augusta are currently in first place on the leader board. The team in captained by Mark Madigan. Injuries to date include Simon Woollams with a ‘blown’ achilles rendering him ‘unfit’ until 2019. fr o
FRIDAY 1 MARCH: New Plymouth investor golf day, invitations will be sent early 2019.
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The Last Word
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The Last Word With Jesse Mulligan - host of TV3’s The Project.
What was your first paid job? I folded jeans at K Mart Hamilton. “But all the jeans are folded!” I would say when the menswear manager told me off for slacking. “Well go and unfold them then fold them again,” would be his inevitable reply. What were you like in high school? Top of the class for maths, bottom of the class for being invited to parties. In 20 years what will you be doing? Pressuring my currently 8 year old daughter to give me some grandchildren, probably. What would a close friend say if I asked them, “What is the one characteristic they totally love about you, and the one that drives them insane?” Secretly they all love the hugs they get after a couple of drinks. But they don’t seem to enjoy going out to dinner with me - I’m a restaurant reviewer so nobody ever quite gets to relax and enjoy themselves.
Kenny Rogers and Dolly Parton singing “Islands in the Stream” is the greatest moment in pop culture history. What’s the best investment you ever made? I bought my wife ballet tickets before she was my wife, my girlfriend or even some girl I’d kissed. One marriage and four children later she has told me in a moment of weakness that night at the ballet was what turned it for me. What is on your perennial to-do list? Finish “Infinite Jest” by David Foster Wallace, which sits in my bookshelf mocking me, with its EFTPOS receipt bookmark 50 pages into a 1000 page novel. What nickname do your friends call you? “Jesse Mulligan”. Honestly I’ll never quite know why that one caught on. What do you work towards in your free time? Looking my children in the eye and having nothing else right now to do.
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Good question! I am about to head north for the summer, where I will be hunting kingfish and gathering pipis. I like both but to be honest the kingfish make for better stories. Nobody’s using a Tinder profile pic of themselves holding up a pipi.
Tell me something that’s true, that almost nobody agrees with you on.
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Are you more of a hunter or a gatherer?
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What’s the one moment you’ve experienced that altered the trajectory of your life? Trying stand up comedy for the first time, hearing the audience laugh, and knowing suddenly that this was an option. Has there been a time when you have genuinely feared for your life, what happened, where were you? I’ve been very lucky. But if one of my children gets a small bruise or a sore throat I feel that same sort of terror. If all failed tomorrow, what is your backup plan? Write words for other people. What was the last costume you wore? I dressed as Wayne for The Project’s Wayne’s World/Bohemian Rhapsody parody music video. Afterwards I said to Kanoa “do you think that was any good?” and she said “well, it’s been shared by the actual band Queen on Facebook, so I think we should count it as a win”. More people saw that than anything else I’ve ever done, and I was wearing a basketball cap and a fake mullet.
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www.augusta.co.nz