Oyster Property Group’s latest proportionate ownership, offering investors the opportunity to invest in C:Drive, 33 Corinthian Drive, Albany, Auckland, has closed early; fully subscribing in just over two weeks after the offer opening.
The $29.25 million equity raise attracted strong demand from both existing and new Oyster investors, according to Chief Executive, Mark Schiele.
“One third of investors who participated in the offer were new to Oyster. The minimum investment of $50,000 opened the opportunity to a large pool of investors, and we were delighted to see so many new investors wanting ownership in a quality commercial property with a tenant of this calibre.”
The syndication scheme, which was marketed by Oyster in conjunction with Colliers International, forecasted to provide investors with a pre-tax cash return of 6.5% per annum, paid monthly. A total of 585 individual $50,000 interests were made available.
The property, a large scale three-level standalone office building valued at $54 million, is located at the heart of Albany on Corinthian Drive and is 100% leased to ASB Bank Limited.
Schiele believes the offer had several attributes which had immediate appeal for investors.
“There has always been strong investor demand for quality commercial property which has outstanding tenant covenant and long term leases. That, combined with the sought-after Auckland location and the projected pre-tax cash return, satisfied investor criteria.”
“We’re obviously very pleased with the speed of the equity raise which reinforces investors’ significant appetite for high-quality commercial property. With historically low interest rates remaining on the horizon, investors continue to seek alternative options for income, and commercial property returns are increasingly seen by many as attractive.”
Schiele says 55% of investors originated from Auckland, with Bay of Plenty and Waikato investors combined providing a further 25% of the equity.
The C:Drive property currently returns just under $3 million in net annual income from 10,248m² of lettable area.
The property was settled on 1 April 2019. Oyster will manage the property and the syndication scheme as part of their wider national portfolio of $1.5 billion of commercial property assets under management.