Augusta Focus Newsletter July 2019 by Buffalo & Co

focus AUGUSTA SHAREHOLDER & INVESTOR NEWS - JULY 2019

COVER STORY

Next Gen Investors Four of Augusta's youngest investors give us insight into the pressures their generation face.

INSIDE THIS ISSUE

FROM THE MD - AN OVERVIEW OF THE FUTURE PIPELINE

AUGUSTA RESIDENTIAL & AUGUSTA TOURISM

HOW OUR GROWTH IS UNDERPINNED BY TECH

(Left to right) Luke Fitzgibbon - General Counsel & Company Secretary, Joel Lindsey - Chief Operating Officer, Simon Woollams - Chief Financial Officer, Bryce Barnett - Executive Director, Adelle McBeth - Head of Operations, Mark Francis - Managing Director.

Contents

Inside 4

From the MD

6 Financial Results

Auckland

Pg 18

Level 2, Bayleys House 30 Gaunt Street, Wynyard Quarter, Auckland 1010

Pg 20

8 Operational Update

PO Box 37953, Parnell, Auckland 1151

9 Our People 12

Cover Story – Next Gen Investors

14 Augusta Industrial Fund 16

Investing in Specialist Talent

18 Spotlight Flagship Store 20 Augusta Residential & Augusta Tourism

T +64 9 300 6161 F +64 9 300 6162

25 Technology

New Plymouth

26 Supporting Local Investors Rotary Golf Day

335 Devon Street East New Plymouth 4312

28 Sponsorship

PO Box 44, New Plymouth 4340

30 Outward Bound

T +64 6 759 1520 F +64 6 759 1521

32 A Taste of Te Arai Lodge

22 Meet the AML Team

34 Health and Wellbeing

24 Heineken Urban Polo

35 The Last Word

FUND LAUNCHING SOON

Man Street, Five-Star hotel project development *No money is currently being sought and financial products cannot currently be applied for or acquired. When an offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013.

focus

| 3

4 |

From the MD

FROM THE MD This fund will continue as an open-ended vehicle, with the ultimate goal to list on the stock exchange when fund scale and market conditions make sense. In the meantime, we will continue to scout out and source quality industrial product, although tightening yields in this sector are making this more challenging.

hile the dreary winter days are starting to creep in, the positivity and excitement felt at the beginning of a new financial year is by no means wavering as we enter the second quarter. INDUSTRIAL FUND AND SINGLE ASSET SYNDICATION It was a strong start to 2019 with Augusta Funds Management bringing two offers to the market concurrently during February and March. The first being the second round of the Augusta Industrial Fund. Five industrial assets were added to the initial four-property portfolio, bringing the total assets to nine and increasing the overall ‘as if complete’ valuation of the portfolio to $300 million. 115,000,000 shares were offered to investors at a pre-tax return rate of 6.5% per annum. As with the first round of subscription, we were overwhelmed with the positive reaction from investors, and the offer closed oversubscribed. While I have said this many times before, I am incredibly proud of the efforts of the entire team as this was Augusta’s largest capital raise to date.

Running in parallel was a capital raise for 255-257 Gympie Road, Kedron - a multi-tenanted commercial property comprising three buildings in Brisbane. As with the Industrial Fund, interest was very strong, and the offer closed oversubscribed after a short sale campaign. It was another significant raise of A$14.8 million and provided a post-tax cash return to investors of 6.1% per annum. I would like to thank all of you that invested in both products and we look forward to bringing other diverse offerings to the market shortly. RESULTS ANNOUNCEMENTS Augusta Capital and our managed listed fund, Asset Plus announced their annual results for the year ended 31 March 2019. The operating result for Augusta Capital was the strongest in the company’s history with record operating earnings delivered on a number of measures. FY19 saw the company continue to gain momentum with the launch of new funds as well as build strong pipelines for further growth in the future. FY19 has been a transitional period for Asset Plus as Augusta Funds Management took the

reigns as an external manager. A new board and management have changed the strategic focus of the company to one that is committed to a value-add mandate, securing target acquisitions that provide opportunities for future upside to be unlocked. TOURISM FUND In 2019, opportunities within the tourism and residential property sector were identified as a key focus for Augusta, and we can now report that a strong foundation is in place for the future Tourism Fund to be launched shortly. The objective of the Fund is to assemble a portfolio of real estate assets and operational business that will benefit from the future growth and success of New Zealand’s Tourism sector. The portfolio will cater to both domestic and international demand and target locations with strong forecast demand and lower seasonal volatility, i.e. Auckland, Rotorua, Wellington and Queenstown. In 2019, two seed assets were secured and are currently being held and under-development for the Fund. 54 Cook Street, Auckland which has a conditional lease agreement with Jucy Snooze Ltd for a 388-bed pod-style hotel, and 17-19 Man Street Queenstown, a 5-star luxury hotel project situated on arguably one of the best sites within the town centre. Most recently announced was Augusta's preferred bidder status in the Lakeview project, the start of a strategic partnership with Australian

From the MD (Continued)

based Ninety-Four Feet to develop at 3ha site in Queenstown over the next 7-10 years. The development site is based on an upper terrace near the Skyline Gondolas base building and plans involve shaping the area into a new, thriving, mixed-use precinct of office, retail and accommodation offerings, including residential and hotels. The consortium is continuing to negotiate a development agreement with Queenstown Lakes District Council at the moment. These opportunities provide an attractive pipeline for the Fund and it is anticipated that the Fund will be launched later this calendar year (2019) once an operator has been selected for the Man Street development and a construction contract is secured. VALUE-ADD NO.2 Many of our wholesale investors will remember the “Value-Add Fund” brand which launched in April 2016. The fund was a great success in both terms of capital raising and providing a return on investment, with the fund winding up earlier than anticipated in January 2019 and providing an IRR of 11.75% to investors. We are currently exploring a variety of “value add” prospects, and as with Value-Add No.1, Value-Add No.2 will follow the same strategic direction of identifying development opportunities and acquiring assets that offer value-add upside. The fund will be structured similar to

that of Value-Add No.1 as it will be offered to wholesale investors only and based around a five-year investment horizon. The first prospect is an offmarket opportunity to acquire a residential land development north of Auckland. We see this as an interesting opportunity, especially given the Government support for development up north, and the northern motorway extension to Warkworth which is scheduled to open in 2021. RESIDENTIAL The housing market has slowed recently with buyer confidence decreasing as people struggle to find affordable housing products that provide a decent return on capital investment. While the Government has scrapped its proposed capital gains tax and is chipping away at providing affordable housing through various initiatives, there is still a prominent gap to provide publicly available investment products that offer direct exposure to residential investment and development without the traditional purchase of a house outright.

SUMMARY As you can tell, investor appetite for managed property funds remains strong with managers able to offer significantly stronger cash returns on investment than the banks.* As competition around traditional retail, commercial and industrial offerings increase, companies are looking to diversify into areas that rivals are not yet operating in. Augusta is no different. In fact, we have always been the market leader at constantly identifying opportunities that will broaden our offerings to investors. Once again, Augusta thanks you for your confidence and support over the first six months of 2019. We assure you there are more exciting times ahead and look forward to an equally successful second half of the year.

MARK FRANCIS Managing Director

While we are still formulating and finalising the strategy around residential, we forsee the ValueAdd No.2 development playing a role in this. Following land development, the residential development could form the cornerstone of the Augusta Residential Fund.

*Investors should consider the difference in risks between managed property funds and banks.

focus

| 5

6 |

Record Result

RECORD RESULT

AND STRONG FUTURE OPPORTUNITIES FOR INVESTORS

ugusta Capital’s annual result, released in May, celebrates the strongest financial result in the company’s history with record operating earnings, the launch of new funds and a growing pipeline of other opportunities for investors. Underlying income, management fees and transactional fees all grew strongly in a year in which Augusta completed its transition to a specialist and diversified funds management model. Profit and Total Comprehensive Income After Tax was $6.95 million, an increase of 116% on the prior year. Milestones for the business included the launch of the Augusta Industrial Fund raising $171 million across two capital raises and two new single asset funds, raising $84 million. Net funds management income was more than 50% ahead at $17.3 million. Augusta Capital Chairman, Paul Duffy, says the result shows the success of the strategic transition, with the managed portfolio now standing at $1.85 billion across two multi-asset property funds and 56 single asset funds across New Zealand and Australia. Managing Director, Mark Francis, says all four funds launched in the financial year had been oversubscribed and the 2020 financial year is shaping up to be a strong one with further new funds under development which will offer investors more opportunities. “Our pipeline is well stocked with future funds, and with a strong balance sheet and low levels of debt, we are very well positioned to deliver continued growth.”

The Augusta Tourism Fund’s development is progressing strongly. Two seed assets in the Jucy Snooze Hotel in Auckland and the Man Street hotel development in Queenstown are under development and the company has entered a strategic partnership with Ninety-Four Feet, an Australian operator with a strong track record in tourism infrastructure. The two companies are engaged in the Lakeview hotel development project recently announced in Queenstown. Augusta’s investment in talent, including expanding its development team, has grown our capability in sourcing and developing properties suited for our specific funds. There is a return on the people investment through the value they generate for Augusta’s shareholders and the investors in our funds. How the return is generated will depend on the property, how it is managed and the development opportunities. If an existing property is redeveloped, it creates equity growth and return on investment for our current investors and security of that return. That’s because the project will also focus on securing a long-term lease, securing future income from the property, while retaining the option to divest and realise equity gains at a later stage. An example is the Value-Add Fund No.1, established in April 2016 to acquire a portfolio of five properties identified as having value-add opportunities through either redevelopment or re-positioning. That Fund was wound up during the financial year, generating an

Augusta Capital Chairman, Paul Duffy, says, "the result shows the success of the strategic transition, with the managed portfolio now standing at $1.85 billion." 11.75% internal rate of return for investors. Included in its portfolio was the 54 Cook Street property, now being redeveloped as a Jucy Hotel within the Tourism Fund portfolio. A Value-Add Fund No.2 is looking likely to be launched this year. Capital released from the sale of the Finance Centre, Auckland, in March this year was subsequently invested into the Industrial Fund, with Augusta committing $19 million for a 10% stake. Capital released also freed up the balance sheet to support the development of the Tourism assets. With the 2020 financial year well underway, the business is well positioned to achieve more growth and to bring more investment opportunities to market. Augusta is investigating and completing due diligence on a wide range of potential opportunities across both single and multi-asset funds.

Key Highlights

KEY HIGHLIGHTS from the Last Financial Year Profit and total comprehensive income for the year

All 4 offers were over-subscribed

net of tax increased

against the prior year to $6.95 million

due to the higher earnings from the funds management business, including the launch of the Augusta Industrial Fund.

launched raising

million

Two new single asset funds

of equity.

171

launched raising

of equity across two capital raises.2

million

116 %

Augusta Industrial Fund

Secured seed assets for the Augusta Tourism Fund and a future pipeline of opportunities

Value-Add Fund closed generating an

11%

.75

Adjusted Funds from Operations1

34 %

(Non GAAP) to $7.7 million, equating to 8.8 cents per share (6.6 cps in the prior year).

internal rate of return for investors.

Enquiry growth has doubled since 2014

Adjusted funds from operations (AFFO) is non-GAAP financial information and is a common investor metric, calculated based on guidance issued by the Property Council of Australia. Augusta considers that AFFO is a useful measure for shareholders and management because it assists in assessing the Companyâ&#x20AC;&#x2122;s underlying operating performance. This non-GAAP financial information does not have a standardised meaning prescribed by GAAP and therefore may not be comparable to similar financial information prescribed by other entities. A reconciliation of the net profit after tax to AFFO is included in the annual report on page 23 which has not been independently reviewed by the auditors.

Augusta Capital co-invested a further $19 million of equity on a long-term basis.

focus

|â&#x20AC;&#x201A; 7

8 |

Operational Update

OPERATIONAL UPDATE BY JOEL LINDSEY, CHIEF OPERATING OFFICER

As the old adage goes, ‘when it rains it pours’, and during the Augusta Industrial Fund capital raise a new single asset vehicle opportunity in Brisbane came about. The Kedron offer was another successful capital raise with a lot more investors introduced to the Australian (Brisbane) commercial property market.

e started 2019 with the successful second capital raise for the Augusta Industrial Fund and it feels like we haven’t paused for breath since. The capital raise for the Industrial Fund was yet another oversubscribed offer. The roadshows provided the opportunity for existing and new investors around the country to meet members of our Investment and Asset Teams during the 35 investor information presentations from Dunedin to Kerikeri.

35 Graham Street, Auckland CBD

We also received approval from Asset Plus shareholders' in June to acquire 35 Graham St, Auckland CBD. This $58 million acquisition is a medium term redevelopment opportunity to create an exciting landmark office building when Auckland council vacates the property in June 2021. To keep pace with our growing portfolio and our investor centric focus, we are continually investing in our people with several new recruits (see our New People section) and promotion of some of our existing staff to new roles.

Over the last twelve months our teams have collectively been working on a new client relationship management system and will be introducing Salesforce mid-year. You will be seeing the benefit of this new system in the coming months. The Asset Management and Finance teams are currently in the middle of investor reporting and you would have received Annual Reports, Financial Statements, tax schedules and an annual Manager's Report for each of the schemes prior to this newsletter. The Annual Meetings will be over the next two months (see Key Dates section) and we look forward to seeing as many of you there as possible. The Investment Team always appreciate the opportunity to put faces to names for our investors and to better understand who we are managing these assets for and why they have invested with Augusta. We look forward to seeing you all soon, either at the upcoming Annual Meetings or on the road with our next capital raise.

Our People

OUR PEOPLE

We are delighted to announce and welcome the following new additions to our team.

NICK GIBSON

WILL ALLAN

MARK JOHNSTON

Finance Manager

Asset Manager

Project Manager

Nick joined the Augusta team in May 2019 as a Finance Manager. Nick has most previously been based in London as a Fund Controller at Tristan Capital Partners, a boutique PanEuropean Real Estate Fund Manager. During his role at Tristan, he managed the finance operations for several real estate funds across EUR 2.5 billion of institutional equity with EUR 6 billion of assets under management. Nick holds a Bachelor of Accountancy and a Diploma in Arts qualifying from Massey University Albany.

Will joined the Augusta Asset Management Team in April 2019. Prior to joining Augusta, he worked at Robt. Jones Holdings Limited where he strategically managed several Auckland CBD office towers and their numerous tenants. Will’s role as Asset Manager will be managing several properties in Auckland, Hastings and Christchurch. This management will include monitoring the overall performance of the properties and communicating that with investors.

Mark joined the Christchurch office in January 2019. Prior to his return to New Zealand in 2017, he worked for PDS Group as a project manager delivering predominantly residential developments. Later during his return to NZ he worked for The Building Intelligence Group on a range of project sectors including commercial, education, local government and residential. Mark’s role as Project Manager will be working closely with the development team to successfully deliver development projects.

Investment in People • Augusta is a people business and having the right team in place is integral to driving the business forward. In FY19, we continued to invest in the acquisition of specialist talent to add depth and diversity of capability to our team as we broaden our product offerings. • The launch of new initiatives is not capital intensive (aside from our co-investment stake) but attracting and retaining capable people is essential to delivering on our strategic objectives to stimulate increased revenue and investment opportunities. • We have invested significantly in the necessary development management expertise, and the

asset management team continues to grow also as we pursue value growth for our investors. • The breadth of the team also encompasses investor relations, marketing, legal and compliance including AML, IT and finance. Aside from the outsource of the property management, the remainder of the management is completed inhouse. • Technology is also a growing focus for our business and we see huge opportunities in areas such as automation and investor engagement. We have been and will continue to invest in this area in support of growing revenue opportunities, and realising business-wide operating efficiencies.

focus

| 9

10 |

Our People (Continued)

JOSH FSADNI

MADDY MOREY

LINDA SAWYER

Finance Associate

Office Coordinator

Portfolio Administrator

Josh joined the Auckland team in January 2019 following a role as a Senior Accountant in the Business Advisory team at Crowe Horwath Limited. Josh obtained a Bachelor of Commerce majoring in Accounting and Commercial Law and later achieved his Chartered Accountancy there also. As a Syndicate Finance Associate, Josh oversees the finance and accounting functions for a portfolio of NZ Syndicates.

Maddy joined Augusta’s Auckland office in 2019 and is responsible for overseeing and managing the day-to-day operations of the office. She is often the first point of contact an investor or visitor will have with the company. She also assists with any ad-hoc project work, planning and preparation of events, accounting functions and administration of applications received during an Augusta offer sell down process.

Linda has recently joined the team in the Auckland Office as a Portfolio Administrator. She has over 30 years’ experience in the property sector, having worked in various roles within the industry in South Africa, New Zealand and most recently for Knight Frank in Australia. Linda’s primary role will be general business support for the Asset Management team. This will involve co-ordinating portfolio functions such as insurances and valuations, liaising with external parties and assistance with the preparation of investor correspondence.

GAVIN FIDDES

MATT DAYMAN

Asset Manager

Senior Development Manager - Residential

Gavin joined Augusta in June 2019 as an Asset Manager for the South Island Portfolio. Gavin holds a Bachelor of Business Studies with a double major in Finance and Valuation and Property Management. Most recently Gavin has held roles with Ngai Tahu Property as a Senior Property Manager and prior to that with KCL Property as an Asset Manager.

Matt joined Augusta in June 2019 to lead our residential investment strategies. Prior to returning to New Zealand in mid-2017, Matt spent nine years working for Lendlease in London – most recently as Development Director for Lendlease’s European residential development business. During this time Matt gained significant experience in largescale mixed-use developments and played a key role in

establishing a Lendlease managed Build-to-Rent investment fund with an initial target to invest £1.5 billion. Prior to joining Augusta, Matt worked at Winton where he was responsible for managing their Launch Bay development at Hobsonville Point. Matt has a Master of Business (Property) from RMIT University, Melbourne and a Bachelor of Architecture (First Class Honours) from the University of Auckland.

Our People (Continued)

We have also had a few updates with our current staff. DEVELOPMENT

LEGAL & COMPLIANCE

INVESTOR RELATIONS

STEPHEN BROWN-THOMAS

KATIE IRESON

KERRI EWART

AML/CFT Investor Liaison

Secondary Sales Manager

Senior Development Manager and Asset Plus Manager

Katie (previously AML/CFT Administrator) is now the AML/ CFT Investor Liaison to reflect her investor facing role within the compliance team both during and outside of the equity raise periods.

Kerri (previously Investor Relations Assistant) is now Secondary Sales Manager as a reflection of the role she does, solely managing the secondary sale and transfer function for Augusta schemes and AIF.

FINANCE

BRAD HINTON

BRENDAN CLOUGH

Senior Finance Associate

IT Manager

Brad (previously Finance Associate) is now a Senior Finance Associate to reflect his role in finance lead for the Augusta Industrial Fund. Brad will now be reporting directly to Mark Madigan, Financial Controller, Funds Management.

Brendan (previously Business Analyst) is now IT Manager to reflect the greater level of responsibility Brendan has with oversight of all technology related objectives for Augusta.

Stephen (previously Development Manager) is now Senior Development Manager as a reflection of his extensive experience and will be managing Asset Plus. Stephen is also the senior staff member responsible for the Christchurch office.

WILL ELLISON Senior Development Manager Will (previously Development Manager) is now Senior Development Manager as a reflection of his experience in development. Will is responsible for leading and managing the Auckland based Development Managers. ASSET

BEN HARDING Head of Asset Management and AIF Manager Ben (previously Senior Asset Manager) is now responsible for leading the Asset team responsible for the New Zealand portfolio as well as the Fund Manager for Augusta Industrial Fund.

MATTHEW SELLES Property Manager Matthew (previous Assistant Asset Manager) is now Property Manager to reflect his sole responsibility and lead role in the property management of our Australian portfolio and SPG properties in New Zealand. He will still carry out some Assistant Asset Manager duties with Bernie Smith but will have his own property management portfolio.

EXECUTIVE SUPPORT

JASMINE MCAUSLAN EA to Mark Francis/Project Coordinator Jasmine, (previously EA to Mark Francis) while retaining her EA duties to Mark, will be working an additional role as an internal project coordinator. This role will use her skill set in organising people and process to provide support and a key pivot for new acquisitions and projects for the senior management and development teams.

SENIOR MANAGEMENT

ADELLE MCBETH Head of Operations Adelle (previous Investor Relations Manager) is now Head of Operations to reflect new responsibilities in overseeing the HR, Marketing, Investor Relations and IT functions at Augusta. Jess Davidson and Brendan Clough will now report to Adelle (along with Wendy, Kerri and Nikki as previously). Adelle is also the senior staff member responsible for the New Plymouth office.

MARKETING & COMMUNICATIONS

JESS MERRILEES Marketing Associate Jess (previously Auckland Receptionist) has joined Jess Davidson in the marketing team to utilise the marketing and communications study Jess has undertaken and has an interest in.

focus

|â&#x20AC;&#x201A; 11

COVER STORY 12 |

Next Gen Investors

Sacha

Daniel

‘NEXT GENS’…

THE TIME TO GET AHEAD - IS NOW

tudies show teens and 20 somethings in New Zealand today are on a track very different from the generations before them. The track set out before the ‘Millennial’ and ‘Gen Z’ generations (let’s call them Next Gens), is far more complex. Social media, smart phones, terrorism and neoliberal politics have been the background to their lives. They face a future of high student loan debt and house prices out of reach for the average kiwi (or average anyone across the globe according to ‘The Economist’). For most Next Gens, the dream of owning their own home has long since evaporated, they are also acutely aware they will have to pay for what other generations are enjoying for free now as well. The 'milk and honey' post-World War II generation aka Baby Boomers whose property and real estate investments have doubled, tripled and in some cases quadrupled or more during the housing boom have made it harder for these Next Gens – who they say, have been priced

out of the market. It’s probably quite true considering the house-price-to-income multiple (an internationally recognised measure of housing affordability where 3x or less is a marker for housing affordability) for most of New Zealand regions sit well above 4x with other areas like Wellington, Tauranga and Auckland over 7x and as high as 9x. Do a quick Google search and there are hundreds of ways we can be teaching these Next Gens about money to help them navigate through these changing times. The problem is, these generations are so utterly different from those before them, that these hard and fast rules seem no longer relevant. ‘Delayed gratification being the key to financial success’ isn’t working for them, they are born of an era where instant gratification is the backbone of their existence; likes on Instagram, access to global brands delivered to your doorstep in staggeringly fast timeframes, items you can take from the store now but paid for later, are the norm. What is plain and simple and still very much a relevant concept is,

like others before them, the Next Gens just want to get ahead. In the last year, Augusta ran an in-depth research project to help us, among other things, understand our investors and their needs better. One of the key learnings was they felt investing should be accessible to everyone as a means to help ‘get ahead’, support retirement savings, ensure a certain type of lifestyle could be lived or maintained and to enable younger generations to start taking an active role in building their own (financially stable) futures. In that same year, Augusta introduced for the first time the lower investment threshold of $10,000, down from $50,000, across the two Industrial Fund raises. What this enabled, was both younger investors being able to afford to invest and parents and grandparents being able to help assist their children into the investment with the purpose being, in many cases, to start them on their financial literacy journey. I recently spoke to four of our Next Gen investors, aged between 19 and 22, to get their perspective on finances, good money habits and what their futures hold. There were

Next Gen Investors (Continued)

Ash

some really interesting principles, which despite their differing backgrounds, they seem to all agree on. They all share very similar 5-year financial goals; they want good jobs that reflect their degrees and expensive student loans, and they want to have bought or be close to buying their first homes. They want good careers and their own home, simple. Their biggest financial fears are the impacts their student loans will have - having their loans hanging over their heads for years, taxes being so high it’s hard to save, house rental price increases and housing (un)affordability. What they also unanimously agree on is that they need both stable incomes and the support of alternative income(s) to achieve their goals. These kids are smart, but what they also had from a young age was their parents or extended family members talking to them about how to be smart with money. Daniel, 22, said his parents often talked to him about the importance of saving, he recalls at the age of 10 starting his first business, mowing lawns for his neighbours. He saved every dollar he earnt and would only splash out at the local dairy if he happened to find spare change on the side of the road. These savings were part of what went towards his first

The best time to start planning your financial future is when you are young... investment – shares in the Augusta Industrial Fund. Ashley, 22, also recalls her father instilling good money habits early, “Dad taught me from a young age, you can only spend $1 once. He also taught me about the returns I could receive from investing, I learnt very quickly, that although the money is not sitting in my account anymore it is gaining over double what it would be earning sitting in the bank.” Rhett, 22, Economics and Finance major, also acknowledges his habits around money were shaped early, “it was my parents who first instilled good savings habits in me, they taught me to have patience with money.” Sacha, 19, has also had very similar family influences, “my greatgrandfather and nana introduced me to the idea of investing. My nana made her first investment when she was only 20 and was able to buy several homes and open her own business. I got a job

Rhett

as soon as I turned 16 and have saved for everything on my own.” Jeff Rose, certified financial planner, author, blogger, and Forbes magazine contributing writer advises that the best time to start planning your financial future is when you are young, “if you do things right, your 20’s offer more than a time to explore – they offer the chance to set yourself up for life. While investing in your 20’s may sound boring, starting young is easily the best way to get ahead.” Mark Francis and Bryce Barnett, Directors and shareholders of Augusta, fathers to three and five children respectively, feel a sense of obligation in helping educate younger generations around financial literacy. “We are looking into different partnerships with banks and financial advisors to develop an education platform for younger people to learn the fundamentals of personal finance, it is an avenue both Bryce and I are emotionally invested in and are exploring further,” says Mark Francis. In the meantime, Augusta are continuing to work towards bringing offers to market with the lower, more accessible $10,000 investment threshold. Current and prospective investors will be emailed any new offers coming to market. www.interest.co.nz/property/ house-price-income-multiples focus

| 13

14 |

Augusta Industrial Fund

Augusta

Industrial Fund 12 Brick Street, Henderson, Auckland

What does investor confidence in Augusta’s Industrial Fund look like? Two oversubscribed capital raises in less than a year. Our two Augusta Industrial Fund offers have given investors the opportunity to access a sector that has out-performed all other commercial property sectors over the past five years. With a minimum investment level of just $10,000, the first capital raises in June 2018 launched a $121 million fund with four assets and 15 tenants. Nine months later, our second capital raise was a similar success. The raise closed again oversubscribed, growing the fund to $296 million and taking the portfolio to nine properties and 47 tenants. The fund now has a 67 per cent weighting towards the Auckland market where demand for good industrial property remains very strong. The fund’s growth illustrates our strategy to provide sustainable and

stable returns through a carefully weighted mix of tenants, industries and locations. All sit within the strong performing industrial sector of the New Zealand property market, with seven properties in Auckland and one each in Wellington and Christchurch. Fund metrics are important in helping manage the risk profile of the portfolio. The fund provides a 99 per cent occupancy rate and an excellent weighted average lease term (WALT) to expiry of close to six years. The weighted average lease term calculates the average lease length across the portfolio, weighted by income level. It is a measure of the longevity of income offered and the potential for properties in the portfolio to become untenanted, which may put income returns at risk. A major benefit of the fund is the diversification across properties and industries, greatly reducing the risk profile. The portfolio includes a diverse range of tenants across stable sectors including logistics, healthcare consumables, manufacturing, furniture and homewares, electronics, consumer

products and printing. These tenants include prominent national and international names such as Toll, Downer, Linfox, MacPac, Fujitsu, Fletcher Steel and Pacific Steel. Having tenants spread across sectors manages risk, by reducing exposure to an industry downturn, such as a fall in demand for construction materials. With forecast income returns of 6.5 per cent per annum, strong risk management disciplines apply both within the current portfolio – and the assessment of future acquisitions. Like our investors, we use debt wisely to generate sustainable returns, with our strategy allowing for a long-term gearing target of 35-45 per cent. With our goal of stable returns, plus the potential for capital growth, we take a risk averse process to identifying future acquisitions. This includes weighing up the fit of a potential property within the current portfolio, its location – with preference given to sites in the “golden triangle” of Auckland, Hamilton and Tauranga – and proximity to key infrastructure including motorways, ports,

Augusta Industrial Fund (Continued)

We also look beyond the propertiesâ&#x20AC;&#x2122; current form to consider the growth potential that could be unlocked.

Castle Rock Business Park, Christchurch

airports, rail and central business districts. Our aim is to target properties with long lease terms or other opportunities. We also look beyond the propertiesâ&#x20AC;&#x2122; current form, to consider the growth potential that could be unlocked through a change of use or zoning in the future. This includes property on land with heavy industrial zoning, which may be rezoned to a higher and better use in the future, enabling a wider range of uses more aligned with current demand. Where to next? The immediate focus remains managing the existing portfolio extremely well to maximise current investors returns and taking advantage of opportunities within the portfolio. As signalled during our second capital raise, a longer-term goal remains listing Augusta Industrial on the NZX Main Board. This would only occur if the scale of the fund and market conditions make it an appropriate option which will benefit investors as well as Augusta Capital as a cornerstone investor.

265 Albany Highway, Albany, Auckland

Ben Harding Head of Asset Management and AIF Manager

focus

|â&#x20AC;&#x201A; 15

16 |

Investing in Specialist Talent

INVESTING IN

SPECIALIST TALENT The Development Team, just one of our specialist teams that pursues the value of growth for our investors

Stephen Brown-Thomas Senior Development Manager and Asset Plus Manager

Mark Johnston Project Manager

Matt Dayman Senior Development Manager - Residential

Investing in quality people has been an integral part of Augusta Capital’s growth strategy. That’s especially so as we have expanded on our historical syndicationbased model (based on single assets) to bring investors more diverse investment opportunities through portfoliofocused funds.

Our development team has grown from one to five within the past two years, with a directive to source or create opportunities which fit our diverse investment mandates. Some will provide the bricks and mortar behind our industrial or tourism funds. Others may be initially owned by the listed business leveraging Augusta’s balance sheet capability ahead of seeding into a new fund under development, such as residential. All will be brought into Augusta’s fund management arm after a careful process of risk management and opportunity evaluation. There is a return on the people investment through the value they generate for Augusta’s shareholders and the investors in our funds. How the return is generated will depend on the property and the development phase. For example, if an existing property is redeveloped, it will create equity growth, and earnings accretion whilst providing increased security of that return. That’s because the project will also focus on securing a long-term lease, securing increased future income from the property, whilst retaining the option to divest to realise equity gains, or alternately secure an NTA (Net Tangible Asset) gain on the back of the development margin. For new investors coming in, it is the creation of new products such as our tourism fund which generates new opportunities

for investor value through development and investment in a burgeoning sector of the economy. With properties under development going into that fund, returns from the properties will be generated through leases or operating agreements, and upon completion will also be accompanied by an increase in net tangible assets through the development margin achieved. Risk management is a crucial part of the development team’s role. They undertake due diligence on contracts and build in risk mitigation strategies around consenting, price and delivery for projects. This will include a range of contingency plans for project completion should the main contractor fail to meet obligations, or any other scenario eventuate. In a process which spans turning the first sod to turning the master key, the development team runs extensive due diligence on sites (green or brown), commissions architects and other consultants to understand planning parameters and opportunities, and runs feasibility and sensitivity studies. They procure operators and anchor tenants in conjunction with real estate partners and other stakeholders and manage all the legal documentation around transactions before integrating these ventures into the new funds, or adding stock to existing funds. It is not unusual for the team to consider ten potential deals before proceeding with just one, nor it

Investing in Specialist Talent (Continued)

| 17

Capital protection and growth is part of the team’s mandate.

is unusual to invest upwards of $100,000 in due diligence ahead of that deal proceeding further. Capital protection and growth is part of the team’s mandate, and an important one. In the initial phases of a fund being brought to market, it is Augusta’s balance sheet doing the heavy lifting as assets are developed or acquired and then warehoused before being transferred into a fund, releasing the capital for further development and warehousing. Work done to conserve and grow the capital through generating appropriate returns on it enables Augusta to continue along its growth path without the need for frequent capital raisings. A prime example of growing investor equity through the development team sits in in the closure of the Value-Add Fund No.1 last financial year. The team worked exhaustively to reposition these five Auckland based assets, and divest all assets within a 2-year period for what was prescribed to

Will Ellison, Senior Development Manager and Dan Mahony, Property Development Manager.

be a 5-year fund lifespan, whilst hitting the targeted 11-14% IRR. Augusta has also leveraged this successful track record to secure the management rights to Asset Plus Limited, formerly NPT. Augusta’s active management, expertise in repositioning assets, and development experience was instrumental in being awarded this

contract to deliver the value-add “yield plus growth” strategy this listed company has now adopted. Augusta holds an 18.85% stake in Asset Plus ensuring our interests are aligned with other investors and providing another platform for investors to access the range of investment offerings managed by Augusta.

focus

18 |

Spotlight Flagship Store

SPOTLIGHT

FLAGSHIP STORE Augusta have a longstanding relationship with Spotlight Property Group (SPG) which originated with Executive Director, Bryce Barnett successfully developing the New Plymouth Spotlight store for them back in the late 90’s. That success has culminated in a relationship spanning over 20 years sourcing, acquiring, developing and managing their property portfolio within New Zealand.

n 2007, we acquired the Harvey Norman Centre in Christchurch for SPG, with the intention of redeveloping the site to accommodate Spotlight as a tenant. The site is Christchurch’s preeminent bulk retail location covering an entire city block and almost 20,000m2 of land. Plans were well advanced, resource consents obtained and building contracts ready to execute when the September 2010 Canterbury Earthquake struck. The buildings

performed exceptionally well with only minor damage sustained and all tenants able to operate without interruption. When the tragic February 2011 earthquake hit, the buildings continued to perform remarkably well with all occupants able to vacate the complex with no injuries sustained. We were quickly on site within 24 hours and arranging the necessary engineer inspections, insurance adjustors, repair works etc. and successfully upgraded the buildings to 67% New Building Standard (NBS).

We also demolished the Western half of the site after proving a total constructive loss (repair costs exceeding rebuild). We successfully negotiated new longterm leases with anchor tenants Harvey Norman and City Fitness who recommenced trading from the upgraded site in 2012, adding significant value for SPG. Over the ensuing 7 years we’ve been working with SPG on a number of potential development options for the site, including a significant multi-level shopping

Spotlight Flagship Store (Continued)

centre which was ultimately stymied due to the rising cost of construction in Christchurch during the post-earthquake rebuild. The various iterations of the development plans have culminated in the currently under construction development; which is a two-level bulk retail building that will house Spotlightâ&#x20AC;&#x2122;s largest NZ store at over 4,000m2, with two separate tenancies on the ground floor. Construction is progressing well and is due to be completed just in time for the Christmas trade period. Augusta have continued to be instrumental in delivering this $20 million project for Spotlight, from developing concepts, testing feasibilities, procuring consents and negotiating construction contracts through to leasing

and ongoing development management (Stephen BrownThomas, Christchurch Office), along with a dedicated internal project management resource (Mark Johnston, Christchurch Office). We're excited to see the past 12 years of work come to fruition with this new development which will become the new flagship New Zealand store for Spotlight, and complete this iconic Christchurch complex.

Augusta have continued to be instrumental in delivering this $20 million project for Spotlight.

focus

|â&#x20AC;&#x201A; 19

20 |

Augusta Residential and Augusta Tourism

AUGUSTA RESIDENTIAL & AUGUSTA TOURISM Core skills transferring to new investment horizons Augusta’s funds management strategy is all about diversity, anchored by our core competencies in asset management, development and funds management. We‘re always looking at how we can give investors exposure to new sectors and new thinking in established sectors and a new source of returns. Augusta Residential and Augusta Tourism are cases in point. They both have property as the central proposition, but each one responds to different market needs, risks and opportunities.

Augusta Residential is a work-inprogress with detailed research and risks analysis underway. We are looking at the changing dynamics and demographics for home ownership and the potential investment opportunities these provide. It is an evolving market at both ends of the demographic spectrum. For younger New Zealanders, the reduced affordability of home ownership is making long-term rentals less of an exception and more of a rule. For their parents, the prospect of freeing up equity from the family home, but maintaining an independent lifestyle is also attractive. Through Augusta Residential we are aiming to develop a fund which provides

innovative investment and lifestyle options. Initial investments will most likely focus on a fully funded land bank, although we remain in the research phase. Augusta Tourism’s establishment as a fund is well underway. In November 2018, Augusta acquired 54 Cook Street in Auckland from Augusta Value-Add Fund No.1 Ltd. This property was the first seed asset for the tourism fund, and we have an agreement with tourism operator Jucy Snooze to convert the property into a “pod” hotel for the budget conscious market. In Queenstown, Augusta Capital also purchased a five-star hotel development project for $13.95 million, late last year, including the land, design, intellectual property and site work.

Augusta Residential and Augusta Tourism (Continued) Man Street, Five-Star hotel project development

The intention is to acquire a 25 per cent stake in a partnership which is negotiating to develop Lakeview, the former Queenstown camping ground. The consortium is led by Melbourne developer Ninety-Four Feet Property. The 3-ha site will be developed over 10 years and Augusta will have the first right to acquire parts of the development which will be sold into Augusta Tourism and potentially the Augusta Residential Fund. We anticipate investors will welcome exposure to the tourism sector through a fund established to invest in tourism infrastructure, including hotels. Our confidence reflects the strong performance of the sector with a record 3.8 million visitors in 2018 and forecasts of 5.1 million international visitor arrivals by 2024. Government studies have shown that almost 10,000 new hotels rooms will be required to meet demand across New Zealand’s main visitor destinations including Auckland,

54 Cook Street, Auckland – Jucy Snooze Pod Hotel and Headquarters

Rotorua, Wellington, Christchurch and Queenstown. Investors and developers have responded to 2016 forecasts that showed 9,700 new hotel rooms would be required by 2025 across Auckland, Rotorua, Wellington, Christchurch, and Queenstown to meet visitor demand. However, updated analysis has continued to identify the supply and demand imbalances which support further investment.

We‘re always looking at how we can give investors exposure to new sectors.

focus

| 21

22 |

Meet the AML Team

Meet the

AML Team If you have recently invested with Augusta, it may seem like we have outsourced our AML queries to the North of England. This is not the case; it is a happy coincidence that our latest AML recruits are both from across the pond. At Augusta we appreciate that understanding our AML requirements can be confusing. Our dedicated team are here to help with any concerns or queries you may have.

Katie Ireson – AML/CFT Investor Liaison – Wine connoisseur from Yorkshire, United Kingdom. Fantastic working knowledge of the AML/CFT Act and often your first point of contact.

Augusta is blessed with a wide range of talented individuals and at busy times the AML team can rely on other colleagues for support. During offer periods Louise Connell, Luke Fitzgibbon, Wendy Roycroft, Kerri Ewart and Maddy Morey all work together to form the wider AML team. WHY IS AML IMPORTANT? Money laundering is the process of disguising the illegal origin of criminal profits. Criminals use a range of methods and levels of sophistication to make money from their criminal activities appear legitimate. Terrorist activity may be financed from funds raised through legitimate sources and criminal activities. People who finance terrorism often use similar methods and tools to those used for money laundering. The Anti-Money Laundering and Counter Financing of Terrorism Act 2009 (the AML/CFT Act) came into effect in 2013 and is designed to help detect and deter money laundering and the financing of terrorism. Augusta are required to undertake customer due diligence including verifying a customer’s identity, address and, in some cases, source of wealth in order to comply with our obligations under the AML/ CFT Act.

David Haczynskyj – AML/ CFT Compliance Manager – Manchester United supporter and football fanatic also from Yorkshire, United Kingdom. Has strong AML/ CFT background in addition to previously working as a fraud investigator for a bank.

WHAT TO EXPECT WHEN APPLYING? Each investor, whether new or existing, is asked to complete an application form. This allows us to capture key information about our customers and is the first step to

All AML information provided to Augusta is stored securely and will be kept confidential. verification. In certain circumstances we may ask how you have funded your investment. Please do not be offended by this, we are just trying to understand the original source of your funds which you are seeking to invest with Augusta. Lastly, we may ask that you supply documentary evidence to support your application. Don’t worry we will not ask for a detailed list of your family tree, we only ask for information that is relevant. HOW WE ARE MAKING APPLYING EASIER We are continuously striving to improve our customer due diligence process to make our investment process as easy as possible. (a) Online application form (Doing our bit for the environment; No more snail mail) You can now apply to invest in Augusta’s latest investment opportunities online. All you need to do is; complete the online application form, upload your supporting documents and click send. Your application is then sent directly to our AML team.

Meet the AML Team (Continued) | 23

David Haczynskyj, AML/CFT Compliance Manager (right).

(b) GreenID online identity verification With GreenID, we can now electronically verify your name, address, date of birth and identification documents. This means that if you have a current New Zealand passport or driver’s licence you will no longer have to send in certified copies of your identity documents as a photo or scan will work. KEEP US IN THE LOOP Change in trustee? Moved to a new house? Let us know of any

changes and we can update our records. By having an up to date AML file, it will be easier for you to apply during future offers. If your accountant or solicitor holds your AML information, provide Augusta with their contact details and we will do the leg work, so you don’t have to. PRIVATE INFORMATION STAYS PRIVATE All AML information provided to Augusta is stored securely and will be kept confidential.

If you decide to leave Augusta, we are required to hold your information for five years before destroying. FEEDBACK If you have any thoughts on how we can improve our application process or you would like to update us on any AML changes, then please contact either David or Katie by emailing enquiries@augusta.co.nz.

focus

24â&#x20AC;&#x201A; |

Heineken Urban Polo

Heineken Urban Polo Augusta hosted a number of new, existing and prospective investors earlier this year at the Heineken Urban Polo in Auckland, including one of Augusta's youngest investors. It is quite a unique event in that you are right up and close to the horses and riders, it is fast paced and even if you are not into horse sports it is hard not to be swept up in the action. We thank all those investors who took part in the day, as always, the Augusta team really enjoy getting to know our investors better. If a bit of horse sports sounds like your cup of tea, let the team know by emailing enquiries@augusta.co.nz and weâ&#x20AC;&#x2122;ll pop you on the invites list for the Heineken Urban Polo 2020.

Technology Investment | 25

TECHNOLOGY INVESTMENT

Brendan Clough IT Manager

Growth underpinned by tech Both Augusta Capital and our managed funds have come through a period of significant change and growth. We are adapting to changes in both the global and local markets, and evolving to serve our shareholders and investors better. Technology is part of this evolution. As head of technology for Augusta, Brendan Clough explains, “taking advantage of technology, is largely about figuring out how it can augment Augusta’s personal touch and improve the experience for both our investors and our staff.” “Everything we do is relationship based, from securing an investor's first investment in one of our funds, to keeping our investors informed about the performance of the fund, and its underlying properties and maintaining touch points through publications, events and meetings. As we grow, our investor base is expanding so our priority is to put systems in place that enable us to continue to deliver the connected and meaningful experiences that investors have always had.” Augusta is implementing a best in breed Customer Relationship Manager (‘CRM’) system. This investment allows Augusta to capture investor details, preferences, and investment goals to provide staff a truly 360 degree view of each individual. This will allow us to both personalise contact to each specific investor, while streamlining processes

that ensure the level of service is consistent and world-class. “We may, for example, have a group of investors very interested in opportunities in a specific region, industry sector or only wholesale offerings. We will be able to tailor communications on investment opportunities and education, ensuring contact is relevant and timely for them.” Data captured via this system will allow us, in the near future, to provide an online portal for investors to login in and easily access their personal investment details, see powerful visualisations around their Augusta investments, vote online on fund resolutions, and receive notifications around upcoming meetings and events. “Our challenge is to ensure technology improves their experience with us, creates value for them and complements, but never replaces the personal touch we’re so well known for.” In addition to a new CRM system, Augusta is also exploring how technology can allow staff to be more productive and collaborative regardless of location. With ‘flexibility by design’ being a key pillar of Augusta’s tech strategy, we are aiming to enable staff to be their best without being tethered to a desk. Whether this is through the adoption of Cloud document management systems, new video conferencing solutions that automatically transcribe meetings, or simply removing the need for desk-phones.

Technology, for us, is about figuring out how it can augment Augusta's personal touch and improve the experience for investors. “From my perspective, what gets me really excited is how significantly we plan to change how staff complete work at Augusta. Through the power of process automation, artificial intelligence (‘AI’) and smart connected devices, we have a very real opportunity to remove or seriously minimise the need for staff to complete manual non-value-add work. It really is an exciting time to be part of an organisation where we are putting these pieces in motion.”

focus

26 |

Supporting Local Investors / Rotary Golf Day

KADINE STAMPS Supporting local investors Stamp collecting, often referred to as “the hobby of kings and the king of hobbies,” has grown from a much-loved passion into a successful business. Long-time Augusta investors of 22 years, John and Patty Kilpatrick share their journey of the still largely popular interest. Kadine Stamps & Collectables had its beginnings in New Plymouth in the early 1990's as a part-time venture for John who has been a keen collector for most of his life of Fijian stamps, postal history and has exhibited in several international exhibitions. By 1997, the Kilpatrick’s began full-time stamp dealing through mail order and attending fairs around the country.

In later years as the internet became more prominent, they moved over to online marketplaces such as eBay and TradeMe as their storefronts to better showcase their collections and sell items of interest. They currently have 22,000 items for direct purchase on their eBay store which they have sold to buyers in just about every country in the world. While the internet remains their main platform to sell stock, the use of the postal system is still heavily used to get their products to customers worldwide from their retail store in New Plymouth. They also supply pre-stamped envelopes for commercial mail to local businesses within the area. This includes Augusta which investors will have seen over the years on mail posted out to them.

ROTARY GOLF DAY Augusta recently sponsored a hole and donated golf balls to the participants at Rotary Papamoa’s Seventh Annual Charity Golf Event. It was a hugely successful day on the green with over $20,000 raised. This is being used to assist three youth programmes in the Papamoa Community along with a mental health organisation.

A favourite item in his collection is the world's first postage stamp the GB 1840 Penny Black with John’s initials in the lower corners.

Stamp collecting is still hugely popular in areas such as Asia and South America with international customers having a particularly keen interest in New Zealand stamps. John and Patty mostly purchase collections or single stamps but on the odd occasion they will buy a complete dealer stock which can end up being quite literally a whole truck load of material. It seems fair to say this is a good indication that the future of stamp collecting is still very much alive and kicking in the 21st century today. To view a selection of the items John has available for sale you can visit www.ebay.com/str/kadinenz or visit www.kadine.com

How Augustina came to be | 27

John and Chris Mclean

How Augustina came to be

Chris and I found ourselves in an interesting situation when our Augusta Albany Highway interest was sold, realising a substantial capital gain. This event happened to coincide with our grandson’s need for his first car. Timing is everything, as they say, so we were able to give him our old, (1998) reliable Toyota Corolla and search for a replacement, resulting in our purchase of a new Toyota CHR. Being the first ever purchase of a brand new vehicle, we found some difficulty in accepting the apparent extravagance of the decision, which we expressed to Bryce, who we all know is no stranger to vehicle purchases himself. He shrugged, smiled and stated the obvious, "Enjoy it!" We thereby allowed ourselves the conclusion that the new car was more in the nature of a gift from Augusta than an acquisition on our part. Accordingly ‘she,’ (being such a graceful vehicle,) has been christened ‘Augustina’ after her Godparents and has been received into our family with gratitude.

focus

28 |

Sponsorship

Supporting the next generation of our industry

KEYSTONE TRUST The Keystone Trust has been giving students a leg-up in property related tertiary studies for over 25 years, and was built on the legacy of the late property developer, Graeme Bringans, who passed away in 1994. His dream was to assist young people entering the property industry - particularly those who have experienced family or financial hardships. After his passing, a group of friends and colleagues founded the Trust in his honour, and put the structures in place to offer scholarships to students in a wide range of disciplines. Since 2014, Keystone has experienced substantial growth but never lost sight of their vision, and their students remain at the heart of everything they do. As a charitable trust, Keystone’s funding primarily comes from the generosity of their sponsors. Augusta became a part of this sponsor family in 2015 with a dedication to support their vision. Keystone’s sponsors are made up of some of the most recognised brands in this industry, all sharing the common belief to pay it forward to the next generation of aspiring property stars. Without the backing of these great organisations, Keystone couldn’t provide the wrap-around support that is a crucial part of

(Left to right) Victoria McArthur, GM of Keystone Trust. Blake Cooper, 3rd Year Bachelor of Property at UoA, 2017 Study Award Recipient. Kaitlyn Turner, 3rd Year Bachelor of Property at UoA, 2019 Bayleys Scholarship Recipient.

the programme. As a direct result of the growth in sponsors over the past few years, not only has Keystone increased the number of scholarships they award, but they are also able to offer their students mentoring and network opportunities, events, work introductions, a buddy system, a mental health wellness programme and significant pastoral care. 2019 Scholarship recipient Kaitlyn is in her third year studying a Bachelor of Property at the University of Auckland and has experienced this for herself. Reflecting on her time with Keystone, she said, “I think the Keystone scholarship is a lot more than giving you some money and sending you off in the world. The team put so much

MAKE A WISH Augusta played in the annual Make-A-Wish Foundation golf tournament where collectively the sponsors involved raised $16,700 which went towards making wishes come true for three terminally ill children in NZ. Augusta also sponsor the Make-A-Wish Foundation through the annual ‘Make-A-Wish art auction.’

into the programme and they'll catch up with you and see how you're doing and make sure that everything's going okay. The [Wellness] workshop was an example of this, and I found it was really helpful to have someone say, you’re normal, this is normal, you can do it and here are some techniques to work towards that. Honestly I have gotten so much out of my scholarship.” Without the backing of the sponsors and the wider stakeholder family, Keystone wouldn’t be able to provide these opportunities to their students, thereby enabling them to become some of the best property and construction graduates in our industry!

Sponsorship | 29

Augusta supports Dhys Faleafaga through the

We are thrilled to be supporting the Tania Dalton Foundation through the financial support of their scholarship programme. The Tania Dalton Foundation has been established to ensure Tania’s passion for sport and for helping others lives on. The Foundation aims to make a meaningful difference to young New Zealanders in the community. It supports young New Zealanders, from all circumstances and stages of development, to unlock their talent and be their best selves. We support 2018 scholarship recipient and newly capped Black Ferns 7’s team member Dhys Faleafaga and are incredibly proud of her achievements to date. Dhys shares some insights of the scholarship programme below and gives us a taste of what it’s like to be part of a national team. "It’s been a whirlwind 18 months for me. During 2017, I was contacted by NZ Rugby and given the opportunity to make an application for a Tania Dalton Foundation scholarship. I feel really blessed to have been awarded a scholarship and I’m grateful for the support of Augusta. Being part of the first group of girls is pretty cool, it’s awesome that I’ve got to meet other like-minded young sportswomen from different sports. The financial support has been massive, and has helped fund my sporting pursuits.

We not only get financial support but also get together as a scholarship group about 3-4 times per year through personal development workshops. One of the workshops that has been a big help to me was about social media and your personal brand when using social media. That’s been so helpful now that I’ve come into the Black Ferns 7’s environment as I do use social media quite a lot and it’s made me think about being authentic when posting. While I was still at school last year, I was shocked to be given a Black Ferns contract. This had been one of my goals and it was a big buzz to be named as a contracted player. It was a real juggle fitting in schoolwork and training. This transition made me become more independent and really start to work on time management skills. Earlier this year I got called up to the Black Ferns 7’s team, this has meant that I’ve moved to Mount Maunganui as the 7’s programme is based at the Adams High Performance Centre at the Mount. I’m lucky that I have some extended family at the Mount and have been able to move in and live with them. With my move to the Mount, the Tania Dalton Foundation paired me up with a new mentor. I have Ali Wieringa from netball as a person that I can touch base with and chat about any challenges that I’m dealing with and even just to talk about life outside of rugby.

My days are really full as we double train five days a week, we have a field session in the morning, shower, eat and then head into the gym in the afternoon. It has been a steep learning curve adapting to how full on the training is. We have Thursdays off and have a day where we will have meetings or appointments with people like the physio or nutritionist. The load has made me aware of the importance of recovery, rehab and managing any injury niggles. I absolutely love the challenge and being part of the team and felt overwhelmed when I pulled on the jersey for my first official game in Tokyo in April. I want to continue to train hard and have my sights set on being selected to go to the Olympics in 2020." For more information on the Tania Dalton Foundation, visit www.taniadaltonfoundation.org. nz/about/

focus

30 |

Augusta and Outward Bound

AUGUSTA AND OUTWARD BOUND Each year we accept nominations from our investors to send either themselves or a family member (child or grandchild) on an Outward Bound course as a thank you for your continued support. It is important to us, as a familyorientated organisation, to give back and play a part in someone receiving the opportunity to grow and reach their potential – as you have helped enable us to do. Outward Bound, located in the Marlborough Sounds, helps participants reach their full potential through challenges in the outdoors. The classrooms of Outward Bound are the mountains, bush and waterways of the Marlborough Region. People of all ages, cultures, abilities and backgrounds are welcome at Outward Bound, with several courses available to cater to the needs of each individual.

All Outward Bound courses are designed on these principles:

be pushed to their limits and helped to conquer their fears.

Learning through Experience – Learn by doing! Applicants will learn about themselves and others from challenge, success and failure, self-reflection and feedback. All activities are designed to promote learning that can be transferred to home and work.

Physical Activities – All activities involve situations where there are real consequences. Outward Bound’s highly skilled instructors deliver courses which include activities such as sailing, kayaking, high ropes, rock climbing, solo experience, tramping and physical training. Previous outdoors experience is not required to participate.

Adventure and Challenge – Outward Bound courses are based on adventure. Participants will have experiences that are physically, mentally and emotionally challenging. They will

Safe and Supportive Environment – While students will be placed in unfamiliar settings, clearly maintained boundaries are enforced ensuring physical and emotional safety. Instructors are chosen with the right combination of skill, experience and abilities, guaranteeing supportive relationships and culture. For more information and course details, go to www.outwardbound.co.nz

If you would like to be considered or have a family member considered, please email Adelle McBeth with how it could make a difference to your (or your family member’s) life. All submissions will be considered, and the recipient will be notified by the end of September 2019. The recipient will have the full course fees paid as well as a $500 contribution towards travel costs. Please email Adelle McBeth, adelle@augusta.co.nz by Thursday 5th September.

Augusta and Outward Bound (Continued)

Our latest Outward Bound recipient shares his experience My name is Chris Cunningham, I am sixteen years old and come from sunny Hawkes Bay. During January 2019, I completed the 21-day Mind, Body and Soul course at Outward Bound in the stunning Queen Charlotte Sound. This is a course that builds character and leadership. Before I went, I was a typical unorganised teen who liked to relax and game. I wouldn’t have dreamed that I would accomplish something so challenging and demanding. When I found out that I had been accepted for sponsorship from Augusta I was kind of nervous because I didn’t know what was going to be around the corner. When I arrived, I was put in a group of thirteen called a ‘Watch’, because who wants 155 16 to18 year old’s doing things all at once!

Outward Bound taught me to be confident in myself and trusting of others; which I experienced on the rock-climbing course. I am slightly scared of heights and when I found out that I would be putting my life in someone else’s hands it wasn’t the easiest thing to accept. However, I knew if I wanted to get the most out of this course then I would have to be confident in myself and try my best. Others in the Watch supported and encouraged me when I was struggling. Conversely, when I went on a three-day expedition, I learnt to be patient, supportive and organised. I’ve been brought up doing substantial tramping so for me this is a strength. There is a quote that my mum would say, “You only go as fast as the slowest member.”

There was no denying that quote as we were walking at less than 800 meters an hour at times which made me feel frustrated. I managed to stay patient and assisted with managing and encouraging the Watch so we could keep at it the whole way. In fact, I was given feedback from my Watch that indicated that I was the most positive, non-complaining, encouraging, easy going person in the team. I will remember this for the rest of my life because it taught me so much. One of my favorite quotes from Outward Bound that I still say frequently is, “If you’re not living life on the edge, then you’re taking up too much room.” I’d like to thank Augusta Funds Management and everyone who helped me on this amazing journey.

Chris Cunningham, back row, red t-shirt

focus

| 31

32 |

A Taste of Te Arai Lodge

A Signature Dessert The perfect midwinter treat I could simply swing by the supermarket and pick up a few waxed lemons from the USA, a couple of sprigs of rosemary suffocated in plastic, a packet of lifeless sprayed almonds, a container of pasteurised honey, a bottle of refined olive oil, a carton of conventional eggs and a loaf of commercial white bread…but that’s just not the way we do things at Te Arai Lodge. Besides, that would be way too quick and easy! Instead, I pluck juicy sun-ripened lemons off our trees with mum, I break off aromatic sprigs of rosemary from our raised veggie gardens, I painstakingly activate our organic nuts from James at Good For (dehydrating them for days to dad’s dismay!), I scrape raw manuka honey from our hives

with Louis, I take our hand-picked Frantoio olives to Greg to be pressed into liquid gold, I pop over to the Matakana Village Farmers’ Market to pick up our fresh free-range organic eggs from Sandra and I drive down to Auckland to collect our freshlybaked sourdough from Alasdair at Daily Bread. Why do I do it? Because I absolutely revel in it! And I want to give our guests the opportunity to do exactly the same! My name is Nicola Moores and I am the girl behind the food at my family’s homestay boutique luxury lodge. My passion for food began at a young age growing up in New Plymouth in the home of a keen garden-to-table foodie (mum)

and a professional chef (dad). My passion only grew when I moved to Italy for high school and university, where I ended up writing my master’s thesis in Italian on the history of food at the University of Bologna – the food capital of Italy. As a sneak peek to the Te Arai Lodge recipe book that I am currently working on, I wanted to share with you one of our signature desserts. Our Lemon Rosemary Olive Oil Cake is one of my personal favourites, not only due to its unique flavour profile, but also because of the fact that it showcases a lot of our own ingredients and thus celebrates garden-to-table food that lies at the very heart of Te Arai Lodge. www.tearailodge.co.nz info@tearailodge.co.nz

A Taste of Te Arai Lodge | 33

Lemon Rosemary Olive Oil Cake

CAKE INGREDIENTS 100 g almonds, toasted 50 g sourdough bread, torn into pieces

Serves 12

2 Tbsps. rosemary leaves, roughly chopped 100 g coconut sugar 2 tsps. baking powder, sifted 1 tsp. lemon zest 4 eggs, beaten 150 ml extra virgin olive oil 4 Tbsps. lemon juice SYRUP INGREDIENTS 50 g honey 2 sprigs of rosemary 125 ml water 8 Tbsps. lemon juice

METHOD Grease a 22 cm diameter springform cake tin and line it with baking paper. Put the almonds, bread and rosemary into a food processor and blend until the texture resembles coarse breadcrumbs.

Set the oven at 180°C and bake for approximately 25-30 minutes or until a skewer inserted into the centre of the cake comes out clean. Leave in the tin for 5-10 minutes to cool. Whilst cooling, make the syrup. Put all of the ingredients into a small pot and gently heat until the honey dissolves.

Transfer to a mixing bowl, add the coconut sugar, baking powder and lemon zest and stir together.

Bring to a gentle boil for 5 minutes allowing the rosemary to infuse.

Add the eggs, olive oil and lemon juice and mix until combined.

Pierce holes in the cake and pour half of the syrup over the cake whilst still warm.

Pour into the cake tin and transfer to a COLD oven.

Once cooled, serve drizzled with syrup, decorated with borage flowers and alongside a scoop of Duck Island vanilla bean coconut ice cream and fresh blackberries.

Key Dates AUGUSTA CAPITAL ANNUAL GENERAL MEETING 10.30am Thursday 1 August st

ASSET + ANNUAL GENERAL MEETING

AUGUSTA INDUSTRIAL FUND ANNUAL GENERAL MEETING Thursday 5th September, Auckland

2.30pm Tuesday 30th July

AUSTRALIAN SINGLE ASSET FUND ANNUAL MEETINGS

NEW ZEALAND SINGLE ASSET FUND ANNUAL MEETINGS

New Plymouth – Friday 1st November

Christchurch – Thursday 22nd August Auckland – Thursday 5th September New Plymouth – Friday 13th September

Annual Reports and Financial Statements for Australian single asset funds will be sent to investors by 30th September 2019 with formal notice of meetings sent approx. three weeks prior to the meetings.

Please note locations of the Annual Meetings are not based on the asset location. A formal notice of meeting will be sent to you approx. three weeks prior to the meetings.

focus

Health and Wellbeing

Why expectations are key to energy management

34 |

Alex is a director and founding partner of Next Evolution Performance (NEP) – a global high-performance coaching business. It has become a bit of a theme in our culture today to say to friends, “you have to say no” and “you can’t do everything.” We seem to know that taking on too much and trying to be everything to everyone is not sustainable. Yet, when we delve into client conversations about things that are drawing overly on their energy levels, it is still down to the amount they have on their plates. We still take on the extra piece of work (to demonstrate our commitment or prove our worth), we still squeeze in one more coffee or social engagement (to stay connected or be a good friend), we stay up later than we should (to connect with our partner or get some personal time), we agree to help out with the fundraiser or local volunteer project (because we feel we should or it’s the right thing to do). It is as if we have no boundaries for ourselves and an unmanaged expectation that we will just keep going until it is physically or emotionally impossible for us to do more. Only at that point will we actually say, “I just can’t right

now.” Sometimes we just can’t face saying no and we start to let people down. Worst of all we find that we let ourselves down and begin to feel low because we have set some unspoken expectations for ourselves that are just too difficult to meet. EXPECTATIONS ARE LIKE IDENTITIES If you don’t define them for yourself, someone will define them for you. If we want to manage our energy well, we first need to define our own expectations of what we are able and willing to take on for ourselves and when it comes to others. Under what circumstances are you able to take on extra work and still complete your core role effectively? When is it realistic to get more involved in your local community project(s)? When is it too much for you to agree to more social activities? If we are to truly ensure our energy is sustainable, we have to make these expectations clear for ourselves, discuss them with our families or partners, and colleagues, and then stick to them. Our own sustainability has to be at the forefront of our lives and decisions if we are to find the energy to offer to others.

Acknowledge your own realistic and energy-supporting expectations and stick to them.

ENERGY DOES NOT EQUAL TIME It is useful to keep this in mind when we are talking about growing and supporting our own energy. Just because you give an hour of your time to helping someone out, it doesn’t necessarily mean that is equivalent to 1/24th of your energy that day. In fact, it may actually have given you energy. When we look at our commitments, we need to consider them based on what drains versus fills our energy cup. Perhaps there are small things that are actually taking up a great, or disproportionate amount of our energy. Can we shift these out of our lives and replace them with things that actually renew and restore our energy? I encourage clients to make a clear list of the things in their lives that give them energy. Then, make a list of the things that drain your energy. Now have a look at how you place them in your day, week, month and year. Are you getting enough of the activities that restore and renew? Acknowledge your own realistic and energy-supporting expectations and stick to them. You are the only gatekeeper to your sustainability and it’s worth guarding closely. For further information or to make a personal enquiry, you can contact Alex via email adavids@neperform.com or visit nextevolutionperformance.com

The Last Word | 35

The Last Word With Nigel Latta

Bureaucracy. It doesn’t matter how great the idea is, as soon as it hits the big sticky wall of bureaucracy it dies a fairly rapid death.

I was a drug mule. Literally. I delivered scripts from our local pharmacy on my three speed bicycle. What would a close friend say if I asked them, 'What is the one characteristic they totally love about you, and the one that drives them insane?' I think the thing they probably like the most is that I’m very low maintenance. The thing that drives them crazy is I forget to do almost all the things I say I am going to do. Tell me something that's true, that almost nobody agrees with you on. That there’s nothing wrong with using American spellings. What do you work towards in your free time?

tt a

Bumping into this girl in a hallway at University. We got married a while later. Best thing that ever happened to me. She’s the smart one. What is the single greatest issue facing New Zealander's today?

What was your first paid job?

I’m more of a hunter gatherer. If the hunting is good I’ll hunt. If the gathering is better I’ll gather. If they’re both bad I tend to just go with Uber Eats.

What’s the one moment you’ve experienced that altered the trajectory of your life?

If you had to give one simple piece of advice for parents (of all ages/stages), what would it be? It’s nowhere near as complicated as the world is trying to tell you. You don’t need to do 3000 things, just six or so things is all your kids need from you.

Are you more of a hunter or a gatherer?

I was a drug mule. Literally. I delivered scripts from our local pharmacy on my three speed bicycle.

If all failed tomorrow, what is your backup plan? Get up, keep going. Keep getting up and keep going. Do this until you can’t go any further. Then stop. Sit under a tree for a while. Then get-up and keep going. What was the last costume you wore? We were filming with 6 Squadron RNZAF and I got to dress up as a Seasprite Helicopter pilot for a sequence in their simulator. Awesome time with some very, very smart people.

The thing I work towards in my free time is having nothing to work towards in my free time.

focus