Oyster fund offers projected seven per cent to investors

5:00 AM Saturday May 28, 2016 True Commercial

The Mitre 10 building in Lincoln Road is one of the properties the Oyster Direct Property Fund will invest in.

Oyster Group has officially opened its new unlisted property investment, the Oyster Direct Property Fund, announcing projected cash distributions of seven per cent, pre-tax, per annum, paid monthly.

For what is being billed as “an affordable minimum investment of $10,000”, the fund offers investors well-diversified exposure to $240 million in quality commercial property throughout New Zealand.

It also allows investors to benefit from potential capital growth, says Oyster CEO, Mark Schiele.

“The Oyster Direct Property Fund will invest in a variety of commercial property assets spanning retail, office and industrial,” says Schiele.

The assets house well established tenant clients, including Countdown, Fairfax NZ Limited, Mitre 10 MEGA, the New Zealand Racing Board, the Ministry of Education, Westpac, RD1, VIP Packaging and City Fitness, he points out.

“To minimise risk, the fund targets a well-mixed portfolio weighted towards major urban locations, high quality tenants and long lease terms. It presents an ideal opportunity for investors to build their wealth via exposure to property assets of significant value and scale for a very reasonable entry point.

“Initially Oyster is seeking to raise a modest $17.25 million of investor equity but the intention is to grow the fund progressively in order to allow investors continuous opportunities to invest.”

The fund will invest in existing Oyster commercial property syndicates and growth will be achieved by purchasing further interests within new schemes and through the fund purchasing its own direct property. The fund will be structured for monthly liquidity from June 2017, and investors will also have the option to reinvest distributions, says Schiele.

“With the official cash rate sitting at 2.25 per cent and predicted to remain at historically low levels for some time, interest in the property fund is already substantial from both existing and new investors.”

Schiele says Oyster is constantly looking to structure commercial property investment products which satisfy investor appetite. He sees the Oyster Direct Property Fund as having particular appeal to investors looking for diversification and monthly cash distributions.

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Mark Schiele, Oyster CEO