Taurus eyes bigger role in property syndications

David Kitson, managing director of Taurus Management.

David Kitson, managing director of Taurus Management.

Christchurch-based property syndicator Taurus Management has been granted a licence under the Financial Markets Conduct Act.

Managing director David Kitson said the licence reinforced the credibility of Taurus with the public.

It certified Taurus as a manager of managed investment schemes to invest in or own property. 

Its sister company, Taurus Group, offers accountancy and capital raising expertise - such as the assistance it gave to business owner Steve Pomeroy to buy the premises of Pomeroys craft beer pub and restaurant.

The good bad and ugly about property syndications  
Augusta unfazed about syndicate shortfall

After completing a $2 million upgrade in 2014, Pomeroy wanted to secure the future of the business and Taurus managed the valuation and the raising of finance.

Taurus has also helped businesses recover in post-earthquake Christchurch such as Verve Real Food Catering and others. 

On the syndication property front, Kitson said Taurus was eyeing up prospects and had also turned down unsuitable ones.

It would provide opportunities for investors mostly in the South Island, although the company was also looking at a property in the North Island.

The new licence gives the Christchurch based firm wider scope to offer managed investment schemes to the public, in addition to the wholesale market. 

Ad Feedback

The difference between the wholesale and retail markets is that wholesale usually means a bigger investment parcel to a more restricted pool of investors as defined by legislation.

Taurus is one of two such licence holders in the South Island.

"We see this as complementary to the larger syndicate managers as the maximum individual property size we will manage is unlikely to be greater than $20 million," Kitson said.

"There are plenty of attractive opportunities in the south, with very good returns and security.  And when it comes to syndicate investment, size doesn't necessarily matter – tenant profile, returns and security do. 

"The syndicates we offer will always have fewer investors. We know it builds confidence to have personal and direct access to a syndicate manager."

In 2011, Taurus took over the scheme management of nine properties from the now liquidated SPI Group, and has almost completed the sell-down of these distressed properties, distributing the proceeds back to investors.

The experience had been invaluable, because Kitson said his accessibility and the personal communication with investors helped enormously.

It also influenced the decision to keep new syndicates below $20m with fewer investors.

Taurus's licence was awarded after a fifteen month application process.

Achieving the licence also meant Taurus realigning its business to ensure Taurus Management's activities are separate to sister company, Taurus Group, involved with chartered accounting and capital sourcing. 

Through the wholesale market, Taurus recently settled the purchase on nine childcare centres, mostly in the South Island, and is currently undergoing due diligence on a tenth centre.

The syndication will soon own properties with a value of $25 million.

More recently the Group settled on a 4000 sqm factory and warehouse property in Dunedin, where a sale and lease back arrangement gave investors the opportunity to be part of a small boutique syndicate with a single tenant providing monthly cash distributions of 8.5 per cent.

Due diligence is under way on two further properties in Christchurch.

The development of Taurus Management has also meant additions to the team including Charlie Goodwin as non-executive director, Michael Kohing as chief financial officer, and Andrew Dorgan as manager distribution.

Taurus Group was established in Christchurch in 1995 and began as a business advisory and corporate finance operation, merging with a chartered accountancy practice in 2000. 

 - Stuff


Ad Feedback
special offers
Ad Feedback