$2.6b Centuria NZ drops minimum investment threshold, takes new direction into storage, residential

Centuria NZ's Mark Francis outside the company's Viaduct Harbour headquarters. Photo / Jason Oxenham

Australian-owned Centuria NZ, with $2.6 billion of funds under management, has lowered its investment threshold to attract more people, is taking a new direction into storage and residential markets and repositioning existing properties.

Mark Francis, Viaduct Harbour-based managing director, said investment thresholds were lowered in 2018 from $50,000 to $10,000 to get more clients.

The Herald has reported problems with the $1b+ Oyster Direct Property Fund which suspended withdrawals, is selling properties and struggling with rising interest rates.

Francis said how Centuria NZ tapped growth in this more challenging market has driven a new direction.

“That certainly has broadened the market for us here in New Zealand,” he said of the lower bar.

“It’s opened up not just retirees with plenty of cash in the bank but a younger audience as well and then via the other end of the spectrum, via the connections in Australia, we now have access to a lot more institutional capital as well,” he said referring to parent company the ASX-listed A$21.1b Centuria Capital Group.

Mark Francis says the business manages about 50 funds. Photo / Centuria NZ

He cited a fund launched late last year, owning 43 College Hill Rd, St Mary’s Bay, sold by Andrew Krukziener’s College Hill Investments to Centuria NZ Value-Add Fund No. 2 LP which has a mortgage to ASB Bank.

That single-asset fund, launched to wholesale investors in November, targets a highly attractive pre-tax 13 per cent internal rate of return per annum running for two years so a combined 26 per cent over 24 months via the managed investment scheme.

The fund wants to raise $23.5m in $100,000 minimum parcels from wholesale or sophisticated investors, buying the building for $21.6m. The offer is “close to being fully subscribed”, a Centuria NZ spokesman said.

That building is being re-purposed from commercial to the expanding self-storage market, including wine storage.

43 College Hill Rd which Centuria bought from an Andrew Krukziener company. Photo / Centuria Capital NZ

The Financial Markets Authority warns against such single-asset syndicated-type funds: “Property syndicates are often advertised as providing regular income, with attractive returns quoted. However, syndicate structures can be complex, there are risks to be aware of, returns are only estimates and you may struggle to get your money out. We strongly advise getting financial advice ahead of investing in a property syndicate.”

Francis says Centuria NZ’s funds are far more likely to be multi-asset, less like the College Hill fund which is what the business had offered in previous years.

Francis cited healthcare, agriculture and industrial funds as holding many properties, not a single asset or building.

Mark Francis says repositioning assets is now part of what Centuria NZ does. Photo / Jason Oxenham

Centuria’s residential swerve is via $1 billion Queenstown plans for Lakeview Taumatea, slugged the “alpine Britomart”, a 10ha ex-camping ground site to be developed in a project with Australia’s Ninety-Four Feet and Britomart Hospitality Group.

Francis hopes for more Queenstown residential schemesand s