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New $120m office building in Albany for Auckland Council a step closer
/ Augusta News

A new $120m building in Albany for the Auckland Council as anchor tenant is a step closer with the developer announcing it will raise $60m in capital to help pay for it.

Late last year small property player Asset Plus entered into a conditional agreement to develop and lease a six-level office building to the super city council, in Munroe Lane, Albany. Some 63 per cent was to be leased to Auckland Council for 15 years with two six-year rights of renewal.

However, Covid-19 intervened. Asset Plus planned to raise $100m to help pay for the development but canned that in March 2020 when the pandemic started to bite.

Now it has announced a new plan to raise $60.2m from overseas investors and from its shareholders, as well as a new deal with its banks, to fund the development.

It said remaining costs to complete the development were estimated at $120m.

It has chosen the Australian construction company Icon to build it and that has to be approved at a shareholder meeting on September 29.

Icon is the builder of Auckland’s tallest apartment building, The Pacifica, 57-levels high, which is scheduled for completion in December.

Construction of the Albany council building was expected to start in November this year with an expected completion date of November 14, 2022 and a targeted completed date of December 16, 2022 under its agreement with the council.

Asset Plus’s manager and major shareholder, Augusta Capital, will oversee the development. Augusta has a lot more backing behind it since being taken over recently by Australian real estate investment management company Centuria Capital.

The land at Munroe Lane cost Asset Plus $7.25m last year. The building will have a 26,675 square metre gross floor area and 15,100sqm of lettable area plus 212 car parks.

Investors and shareholders are offered new shares in Asset Plus at a cost of 30c a share to raise the $60.2m

Asset Plus chairman Bruce Cotterill said the $60.2m would be used to repay all outstanding debt with remaining cash and restructured bank facilities being drawn upon throughout the development period for Munroe Lane.

If the development was completed in line with Asset Plus’ indicative development timetable and cost plan, the value of its investment properties were expected to increase by approximately $134.5m, Cotterill said.

Other properties owned by Asset Plus include Eastgate Mall in Christchurch, a shopping centre at 22 Stoddard Road in Mt Roskill, Auckland, and a former Auckland Council building in Graham Street, central Auckland, which it bought in 2019 for $58m.

Auckland Council has agreed since then to extend the time until the end of October for Asset Plus to resolve and confirm its funding.

Asset Plus received resource consent for the development in May 2020.