Knowledge Hub

Welcome to Oyster’s Knowledge Hub. We understand that investors often have a variety of investment questions for our team; so we’ve collated the most common topics queried by investors, and supplied a detail explanation with supporting videos from Oyster’s key stakeholders. If you still have an unanswered question or if you would like to speak to us, please contact the Oyster Investor Team directly or submit your query below.

Oyster's Investment Philosophy

Oyster's investment philosophy focuses on transacting on quality assets in strong urban locations, combined with reputable tenants and long-term leases and managing these assets effectively via our in-house asset & facilities management teams to maximise investment returns.

Oyster Chief Executive, Mark Schiele

Oyster Chief Executive, Mark Schiele

About Oyster

Oyster is a leading New Zealand commercial property and fund manager with expertise in property fund structuring and equity raising. Oyster currently manages over 20 property funds structured for retail and wholesale investors, including Oyster Industrial, Oyster Large Format Retail Fund and the diversified Oyster Direct Property Fund.

The company partners with institutional capital and private equity investing in commercial property and holds management mandates with third party property owners across development, asset management, property and facilities management, and retail leasing.

Oyster manages a range of retail, office and industrial assets throughout New Zealand, with a combined value in excess of NZ$2.0 billion. The team comprises specialists in transactions, asset and property management, development and finance.

Oyster Property Group is 50% owned by ASX listed Cromwell Property Group.

Oyster Chief Executive, Mark Schiele

Oyster Chief Executive, Mark Schiele

Unlisted Property Funds

An unlisted property fund provides an opportunity for investors to collectively invest in quality large-scale commercial property assets that may otherwise be out of reach for many investors.

Unlisted property funds typically offer a more regular income stream than share market listed property funds, with cash returns generally paid monthly. This creates a steady stream of income that can supplement an investor’s lifestyle or, in some cases, be reinvested to compound returns.

Oyster’s investment vehicles are unlisted and often preferred by investors who wish to receive monthly distributions or who wish to avoid the volatility of the share market. Our funds can consist of a single-asset or a multi-asset portfolio that provide diversification of property and income streams.

Oyster Retail Investment Manager, Rich Lyons

Oyster Retail Investment Manager, Rich Lyons

Liquidity & Re-Sales

At the time of a re-sale, Oyster will provide an investor a summary of the fund’s performance and comparable re-sale evidence where applicable, this assists the investor in establishing their asking price, prior to Oyster marketing the investment for re-sale.

Once an asking price and settlement timeframe is agreed, they can consider the following options to sell their investment:

  • on an off-market basis to investors who have previously expressed their interest with Oyster;
  • market to all existing investors within the fund; or
  • market to all other existing and prospective investors who subscribe to Oyster’s new offers and re-sales.

The seller instructs Oyster on their preferred method of sale. All relevant investment documentation is made available to prospective investors. Oyster prepares all sale documentation for execution and the purchaser deposits their funds to Oyster to be passed onto the vendor on settlement date.

Generally settlements occur at the end of the month, however if both parties agree, a specified settlement date can be accommodated. Oyster charge an administration fee of 2% plus GST of the transaction value, for arranging the successful transfer. This fee is always payable by the seller. Oyster provide liquidity to investors whatever their reason may be for wishing to sell their investment. In the last 3 years to June 2021, we have successfully completed re-sales totaling approximately $35 million dollars, generally commitment is gained within 2 to 4 working days. In instances where buildings are sold, all investors are paid out their proportionate share of the scheme’s equity after all costs, including any capital gain. The Oyster Direct Property Fund accepts monthly redemption requests, payable the following month, subject to available funds.

Oyster Equity Raising Executive, Brodie Pritchard

Oyster Equity Raising Executive, Brodie Pritchard

Single Asset vs. Multi-Asset Funds

We continue to receive range of queries from investors regarding their preferences to invest in either a single-asset fund or a multi-asset fund. In short, it is down to investor preference; every investor typically will have their own reasons why they prefer one fund type over another or in some cases, they are happy to invest in both.

For the last few decades, single asset funds have typically been the investment of choice, however, over the last five years, we have seen a shift by property fund managers towards multi-asset funds.

In Oyster’s view, there is a place in the market for both and the fundamental difference between the fund types is largely the spread of risk through diversified investment.

Investors who prefer single-asset funds typically require a higher minimum investment of $50,000 or more. Generally, they have a stronger preference to make their own investment decisions concerning the property’s location, asset class, construction type and age, tenant mix and weighted average lease term. Often these investors have funds readily available throughout the year and are comfortable making a prompt decision to invest in a single asset fund when an opportunity arises.

Multi-asset funds can offer different entry points with some funds starting with a minimum investment of just $10,000 through to approximately $50,000. These funds can target a specific asset class or a spread of assets classes and are structured to invest in further property over time; this provides investors with the ability to diversify their exposure. Through this type of investment, single property & tenant risk, vacancy risk or unforeseen capital expenditure can be spread across a portfolio of property investments and provide investors with comfort around their investment; this usually eases any concerns regarding the performance of a specific property or tenant under a single-asset fund. Further acquisitions and divestment of properties within a multi-asset fund is the responsibility of the manager. Investors should always ensure they invest with a manager who has a strong track record and a well-defined investment strategy for the fund.

Oyster Retail Investment Manager, Rich Lyons

Oyster Retail Investment Manager, Rich Lyons

Minimum Investment

The minimum investment in an unlisted property fund can vary.

The Oyster Direct Property Fund has a minimum investment of $10,000 with further investment made in multiples of $1,000 thereafter.

Oyster typically structures new single asset or multi-asset funds in parcels of 50,000 interests or units with a minimum investment of $50,000 and multiples of $50,000 thereafter.

At times Oyster can structure unlisted property funds in the form of a wholesale offer and these funds typically have a minimum investment of $750,000 or $1,000,000.

Oyster Equity Raising Executive, Brodie Pritchard

Oyster Equity Raising Executive, Brodie Pritchard

Returns

The forecast level of return for an unlisted property fund is determined on a case-by-case basis and is largely dependent on the make-up of the underlying commercial property assets which can vary by location, asset class, tenant mix and lease term.

Oyster’s returns are stated on a per annum basis, pre-tax and net of management fees. All returns are paid to investors monthly in arrears on either the 10th, 15th or 20th of the following month.

Retail & Wholesale Offers

Oyster is licensed under the Financial Markets Conduct Act, this allows us to offer both retail and wholesale offers to the public.

Retail offers are required to be registered under the Financial Markets Conduct Act. They also require a registered Product Disclosure Statement and have ongoing compliance obligations under the Act. A supervisor has to be appointed to hold the assets of each fund as custodian on behalf of investors.

The supervisor conducts all investor meetings and Oyster is required to regularly report to the supervisor. The main benefit of having a supervisor is that they monitor the performance of Oyster, as the manager of the fund, and that the requirements of the governing document and the Financial Markets Conduct Act are complied with. Typically, Oyster’s retail offers have a minimum investment of $50,000, or $10,000 in the case of the Oyster Direct Property Fund.

Wholesale offers do not provide the same level of protection for investors as they are not registered under the Financial Markets Conduct Act and do not require a supervisor. To invest in a wholesale offer, an investor needs to qualify as a “wholesale investor” or as an “eligible investor”. To qualify as a wholesale investor, an investor must have a minimum investment in existing financial products, minimum net assets, or business experience in investing in financial products. Investors who invest $750,000 or more do not have to satisfy any criteria. If investors do not meet the wholesale investor requirements, they may be able to apply as an eligible investor and provide a written statement confirming their previous experience in acquiring or disposing of financial products supported by their chartered accountant, solicitor or financial advice provider. Typically, Oyster’s wholesale offers will be a minimum of $750,000.

For further information about Oyster’s investments, please refer to the offer documents and we encourage you to seek independent advice.

Oyster General Counsel & Company Secretary, Ian Hasell

Oyster General Counsel & Company Secretary, Ian Hasell

Key Risks

Investors should consider the key risks to investing in an unlisted property fund. For each investment Oyster outlines the key risks to an investment in a Product Disclosure Statement or Information Memorandum depending on the type of offer.

Liquidity Risks

Oyster has an established investor and prospective investor base however there may be circumstances where market conditions or the fund’s performance impacts the ability to sell your interest(s). On this basis, Oyster cannot guarantee that there will be a willing buyer for your interest(s) or a willing buyer at an acceptable price for your interest(s).

If a property were to be sold, the property market conditions at the time would largely dictate the price that could be achieved and how long it would take to sell the property.

Bank Loan Risk

The interest payable on the bank loan is usually the largest expense for a property owner. Changes in interest rates can have a material impact on the distribution from the scheme. Interest rate risk can be managed by fixing the interest rate for a period on all or part of a loan. Oyster regularly reviews the bank loans and assesses whether fixing interest rates are of benefit. Fixing interest rates rather than using a floating rate provides certainty of the interest expense over the period that the rate is fixed.

Property Related Risk

Oyster invests in physical assets which can require substantial repairs and maintenance, or can be destroyed by fire or earthquake and the income from the property or properties is often reliant on a few major tenants paying rent. Unforeseen maintenance, structural repairs or works of a capital nature, which the landlord is responsible for, could be difficult to fund from working capital; if this occurs, bank borrowings and/or a reduction in distributions might be required.

Oyster carries out detailed annual budgeting each year to minimise unforeseen expenditure and regularly reviews the lifecycle of a building’s plant and machinery, such as lifts and air-conditioning. Each scheme has insurance in place to provide cover for material damage and loss of rents.

Tenant Default

A principal risk of commercial property investment is that a tenant will be unable to, or may chose not to, pay rent and outgoings under their lease which would ultimately reduce the income return on the investment. Reduced rental can be significant as this will reduce cash distributions to investors and may impact the value of the property investment too.

Oyster undertakes credit checks on new tenants and obtains personal guarantees or bank guarantees from tenants (where possible).

Our Funds

Oyster offer a range of multi-asset funds with the aim to provide investors with a stable monthly income stream and the potential for capital growth. Here’s an overview of the following funds, the Oyster Large Format Retail Fund, Oyster Industrial and the Oyster Direct Property Fund:

The Oyster Large Format Retail Fund is a pure play, PIE structured unit trust. It provides tenant and property diversification within the Large Format Retail sector, one of the most resilient and strongest performing asset classes. The Fund has a particular focus on properties anchored by supermarkets and large format hardware stores. A key objective for the Fund is to deliver a stable monthly income to investors whilst providing the potential for long-term capital gain. Annualised total returns generated by the Large Format Retail sub-sector to March 2021 have outperformed all other commercial property asset classes. Total call retail spending has reached record levels and significant contributors have been supermarkets and large format hardware stores. Large Format Retail properties are typically characterised by significant landholdings and easily accessible sought after locations. All of these attributes provide enduring investment value.

Oyster Industrial Limited is a pure play industrial and logistics property vehicle established in 2019. Oyster Industrial is an open-ended unlisted fund which will grow through further acquisitions. It gives investors access to a diversified portfolio of industrial real estate. Targeted investments provide tenant and property diversification within the industrial and logistics sector. The Fund’s key objective is to deliver a stable monthly income stream to investors, whilst providing the potential for long-term capital gain. The industrial and logistics asset class has consistently performed well pre, during and post pandemic. Limited supply of appropriately zoned industrial land and rapidly growing logistics demand have resulted in low vacancies, rental growth and capital appreciation.

The Oyster Direct Property Fund is an unlisted commercial property fund which aims to provide investors with a stable monthly income stream, combined with the potential for capital growth, through investing in a diversified portfolio of quality property assets. This PIE fund targets a portfolio weighted towards major urban locations, quality tenants and long leases across office, large format retail and industrial asset classes, in a single investment vehicle. The fund offers a mix of investments, taking stakes in both single-asset and multi-asset funds as well as owning property outright. This enables the fund to diversify its asset classes, properties and tenants and provide a spread of risk for investors. The Oyster Direct Property Fund’s minimum investment is $10,000 with multiples of $1,000 thereafter. Distributions and redemptions requests occur on a monthly basis. The fund offers a distribution reinvestment plan which provides investors with the opportunity to have their monthly returns reinvested into the fund to build wealth through compounded returns. The fund currently has over 800 investors with an average investment amount of more than $170,000 per investor and provides diversified exposure to over $1 billion dollars in commercial property.

Oyster Chief Executive and Retail Investment Manager, Mark Schiele and Rich Lyons

Oyster Chief Executive and Retail Investment Manager, Mark Schiele and Rich Lyons

Tax

Oyster has a range of unlisted property funds. Our multi-asset funds include the Oyster Direct Property Fund, Oyster Industrial Limited and the Oyster Large Format Retail Fund.

These funds are PIE structured and provide the potential for tax advantages due to the highest tax rate being 28%. Returns are paid monthly less the nominated tax rate which is provided by the investor. Which means investors receive monthly returns after tax. An Annual Tax Certificate is provided to all investors after each financial year ending 31 March.

Oyster also structures proportionate ownership schemes; these are typically for single assets only.

Returns are also paid monthly, however Oyster pays the gross return to investors.

Oyster provides investors with the audited financial statements after each financial year ending 31 March. These financial statements provide a schedule of taxable income for the scheme and on a per interest basis.

Investors generally provide this to their accountant or tax agent to complete their tax return.

Oyster Chief Financial Officer, Rachel Barr

Oyster Chief Financial Officer, Rachel Barr

Fees

The fees and expenses payable by a scheme are outlined in the relevant Product Disclosure Statement or Information Memorandum. The fees can vary between different investment vehicles.

There will be one off fees for establishing a new scheme and acquiring the property. Ongoing fees are payable in relation to the management of the property and the scheme.

Bank Funding

Similar to our investor relationships, our banking relationships are significant stakeholders in any given investment and therefore, Oyster ensures that it maintains strong relationships with New Zealand registered banks.

Typically, we structure our Loan-to-Value (LVR) between 45-50% of the property purchase price. Loan terms are typically structured for 2-3 years with the ability for the loans to be extended or refinanced.

Interest on borrowings are generally charged at the bank bill rate plus a margin.

Interest rates are the single largest expense for a fund and Oyster reviews all interest rates on an regular basis. Generally, Oyster look to ensure that 50% to 100% of the borrowings are fixed for the term of the loan. Oyster’s decision to fix interest rates is dependent on the interest rate outlook and market conditions at the time.

Depending on the level of borrowing, and the underlying commercial property, the borrowings can be provided by a single bank or multiple lenders.

Oyster’s investors are not required to provide personal guarantees and generally payments are structured on an interest only basis without principal payments.

Lending arrangements are summarised in all of Oyster’s offer documents and our ongoing investor reporting.

Oyster Transaction Executive, Tom Marshall

Oyster Transaction Executive, Tom Marshall

Active Asset Management

Oyster believes active asset management is the best way to protect the value of, and maximise returns from, your property investments.

Our specialist team of property, facility and asset managers are in constant communication with our occupiers to understand their needs and challenges.

We work to develop solutions that support both the occupier and your investment. Delivering value-enhancing initiatives is also a top priority for our team.

Our active approach means we always look for opportunities to increase rental growth, improve and extend lease terms, and explore new revenue opportunities on behalf of our investors.

We ensure our properties remain relevant in the market by improving on-site amenity and through sustainability initiatives, providing an environment that existing occupiers continue to enjoy and attracts exciting new Tenants to our buildings. Keeping abreast of trends in this space helps us ensure consistent occupier demand.

Our team place emphasis on securing new tenants with strong financial backing, appropriate lease security and a successful trading history.

The final aspect of our approach is real-time monitoring of political, social and economic environments and how they impact the property industry. This ensures we remain agile and able to change quickly to benefit our properties, occupiers and investors.

Oyster General Manager – Property, Steven Harris

Oyster General Manager – Property, Steven Harris

Anti-Money Laundering

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 requires Oyster to put preventive measures in place to help detect and deter money laundering and terrorism financing.

A key requirement of the AML regime is to conduct customer due diligence on all individuals and entities investing with Oyster. This process involves verifying the identities of the ultimate beneficial owners of an investment, any individuals with effective control of the investor or individuals acting on behalf of the investor. The information required to complete the customer due diligence process will vary depending on the investor and in some cases, such as Trusts, additional documentation including evidence of Source of wealth or funds will be required.

Customer due diligence is a mandatory requirement. Oyster partners with First AML, a specialist service provider, who conduct customer due diligence on Oyster’s behalf. First AML will contact Oyster investors directly to collect the required information.

Further information regarding the customer due diligence process can be obtained by contacting the Oyster Investor Team.

Oyster AML Compliance Manager, Sharon Campbell

Oyster AML Compliance Manager, Sharon Campbell

Professional Advice

Oyster can explain the information contained in the Product Disclosure Statement or Information Memorandum for the scheme however the decision to invest ultimately sits with the investor.

Oyster does not provide financial advice or recommendations; prospective investors are recommended to seek professional advice from a financial advice provider which considers their personal circumstances before making an investment decision.

Our Investment Philosophy

Oyster’s investment philosophy focuses on transacting on quality assets in strong urban locations, combined with reputable tenants and long-term leases and managing these assets effectively via our in-house asset & facilities management teams to maximise investment returns.

Oyster Chief Executive, Mark Schiele

Oyster Chief Executive, Mark Schiele

Meet Our Investor Team

Rich Lyons

Rich Lyons

Retail Investment Manager

Genevieve Taylor-Ford

Genevieve Taylor-Ford

Equity Raising Executive

P. 021 0220 7672

E. genevieve@oystergroup.co.nz

Brodie Pritchard

Brodie Pritchard

Equity Raising Executive

P. 021 104 7244

E. brodie.pritchard@oystergroup.co.nz

Emmy Mitchell

Emmy Mitchell

Investor Relations Manager

P. 021 347 089

E. emmy.mitchell@oystergroup.co.nz

Anna Visser

Anna Visser

Investor Relations Support

P. 021 176 8271

E. anna.visser@oystergroup.co.nz

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