Our strategy is to build our portfolio based around a mix of Core and Value Add properties. Core properties are well-constructed, well-located assets we intend to hold long term (>10 years). Value Add properties are those which, through skilled asset management, we believe can increase future earnings and provide capital growth.
The key features of Core properties are:
- Strong long term demand (well-located and generic).
- A preferred leasing profile that provides for rental growth of at least CPI.
- Excellent structural integrity with minimal capital expenditure required on maintenance.
Value Add properties are also well-located with the potential for strong long term tenant demand. These properties are available for near to medium term repositioning or development with a view to moving them into the Core category.
Core properties will make up 75% to 90% of the portfolio by value. Core properties currently represent approximately 85% of the portfolio and Value Add 11%. Approximately 4% of the portfolio will be divested as market conditions allow.
Where will we buy?
We will target "off-market" acquisitions and avoid competitive processes. Target Value Add properties where we can leverage internal expertise within overall Core/Value Add targets. Target contiguous properties with potential.
We will focus on good quality Office, Industrial and Large Format Retail. Concentrate on Auckland (65-75%) and Wellington (20-30%). Regional North Island or South Island tenant-driven only (<10%). We do not invest in leasehold or international properties.
- Greater than $10 million unless strategically imperative ($6 million for Industrial) ✓
- No more than 10% of overall portfolio value ✓
- Apply Argosy's due diligence checklist ✓
- Structural integrity > 70% of National Building Standard (unless this represents a Value Add opportunity) ✓
- Developments only for tenants who provide strategic value to Argosy ✓
- Joint ventures will be undertaken only where the counterparty is of sufficient financial standing to carry their share of risk ✓
- No third party management of external portfolios ✓
View a PNG version of the Investment Strategy diagram.