Our Investment Approach

Our Investment Policy sets the boundaries within which we will operate and invest, clearly defining what properties we will seek to own.

We have a clear acquisition checklist against which we measure potential acquisitions. In some cases, we may consider a portfolio of assets, so long as it is consistent with our overall strategy. In other words, the majority by value of the properties meet our definition of Core properties or offer potential to move to Core in the medium term.

Investment Strategy

Where will we buy?

40-50% Industrial

30-40% Office

15-25% Retail

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.

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%). No leasehold and no international properties.

Value Parameters
  • Greater than $10 million unless strategically imperative ($6million for Industrial) ✓
  • No more than 10% of overall portfolio value ✓
Due Diligence
  • Apply Argosy's due diligence checklist ✓
  • Structural integrity > 70% of National Building Standard (unless this represents a Value Add opportunity) ✓
Development
  • 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 ✓
Other
  • No third party management of external portfolios ✓

View a PNG version of the Investment Strategy diagram.

 

In certain circumstances, we may consider exceptions to the Investment Policy where an acquisition is made to meet the requirements of a valued tenant. 

We are focused on maintaining a diversified portfolio of quality properties with a liquid ratio of 24% of the portfolio. This allows us to be nimble and react quickly to changing market conditions.

The Board intends to maintain the debt-to-total-assets ratio between 35% to 40% in the short to medium term. In the current environment, property sales of income producing assets have the potential to dilute earnings strongly. With this in mind, the divestment of vacant land or under yielding assets will remain a key strategy in maintaining the ratio between required parameters. 

The portfolio has well diversified income streams, with the largest tenant in the portfolio being New Zealand Post (approximately 8% of gross property rental).

Industry Overview

Argosy is one of nine listed property vehicles (LPVs) that make up the New Zealand listed property sector. Internationally, LPVs are sometimes known as real estate investment trusts (REITs). 

New Zealand property is considered a lower-risk, lower-return market. By market capitalisation, the New Zealand listed property sector is valued at over NZ$8.5 billion, with Assets Under Management of more than NZ$11.5 billion. It is diversified across the traditional asset classes of office, industrial and retail.

LPVs are listed on the NZX. As an investor, they provide a number of benefits when compared to traditional (direct) property ownership. They:

  • provide exposure and access to commercial property returns without large upfront capital requirements 
  • enable diversification across a wider range of properties across geographic locations
  • provide exposure to assets of a quality and scale that individual investors could not normally buy on their own 
  • allow immediate liquidity through the ability to sell units/shares through the stock exchange. 

How to invest

Contact your broker to find out how to invest in Argosy Property Limited. If you aren't registered with a broker, you’ll find a list of brokers in your area on the NZX website.