Investors have snapped up the million-dollar opportunity to own interests in Oyster Group’s Cider Building syndication, which has closed early and oversubscribed.
A total of 50 interests of $1 million each were made available to wholesale investors only, with a projected pre-tax return of 7.5 per cent per annum. The company marketed the interests in conjunction with Tim Lichtenstein and Charlie Oscroft from Colliers International’s Syndications division.
The Cider Building, located on the corner of Williamson Avenue and Pollen Street in the central Auckland suburb of Ponsonby, is anchored by a 20-year lease to General Distributors, with additional tenanted commercial space and street level retail. Mark Schiele, Oyster’s CEO, said the successful syndication was the company’s largest-ever single equity raise under a multi investor ownership structure.
“Oyster’s ability to raise $50 million of equity in one week demonstrates both demand for this type of quality commercial property investment and investors’ confidence in our management expertise to optimise investor returns,” Schiele said. “Property ownership structured for wholesale investors continues to be a very important part of our growing property and funds management business.”
The high profile property is nearly complete and is a 13,200sqm mixed use retail and office development. It comprises a new 4000sqm Countdown supermarket, 8000sqm of office space across three floors, 11 specialty retail tenancies over 900sqm along Williamson Avenue and Ponsonby Road, and around 520 basement carparks.
Cider has been developed by Progressive Enterprises and will be 100 per cent leased to General Distributors Limited (Countdown), Fairfax NZ Limited (on a 12-year lease) and convenience retail. Oyster purchased the property at a yield of 6.74 per cent, equating to a purchase price of approximately $93 million, with settlement due in June 2016.
Schiele said the combination of elements which attracted wholesale investors and resulted in a rapid successful syndication included the high profile tenants, a landmark new building and an outstanding location in a sought-after residential catchment.
