Investors fizzing over Cider offering

5:00 AM Saturday May 21, 2016 True Commercial

The near-completed Cider building, on the corner of Williamson Ave and Pollen St, Ponsonby.

Investors have snapped up a “million dollar opportunity” to own interests in Oyster Group’s Cider building syndication which has closed early, 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 pa.

Oyster marketed the interests in conjunction with Tim Lichtenstein and Charlie Oscroft from Colliers International’s Syndications division.

The high profile property, on the corner of Williamson Ave and Pollen St 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 chief executive, says 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. Property ownership structured for wholesale investors continues to be a very important part of our growing property and funds management business.”

The Cider building is nearly complete and is a 13,200sq m mixed use retail and office development, which is a key point of difference in city-fringe commercial investment-grade property.

It comprises a new 4000sq m Countdown supermarket, 8000sq m of office space across three floors, 11 specialty retail tenancies over 900sq m along Williamson Ave and Ponsonby Rd, 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 next month.

Schiele says the combination of elements which attracted 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.

TRUE COMM Mark Schiele Headshot.jpg

Mark Schiele, Oyster Group