18 Dec 2012

Argosy to raise $100m to fund purchases of office buildings

6:52 pm on 18 December 2012

Argosy plans to raise $100 million to fund the acquisition of two office buildings in Wellington.

The property company said on Tuesday it will raise up to $80 million through a share issue to institutional investors. Existing shareholders will have the chance to buy up to $20 million worth.

The properties are the former Ministry of Defence building in Stout Street and the New Zealand Post headquarters in Waterloo Quay.

Argosy says it will spend $93 million on the purchase and another $90 million upgrading them.

The capital raising together with existing debt facilities and property sales, will fund the upgrade.

Argosy's overall portfolio will increase to 65 properties worth around $1.1 billion.

Argosy said the purchases are in line with its strategy to make acquisitions that are well located and meet the needs of tenants.

Eligible shareholders will be invited to subscribe for new shares in parcels of $1000 to a maximum of $15,000 each.

The share purchase plan will close early February.

Shares in Argosy Property remain on trading halt following the announcement.