Oyster’s latest offering, providing investors the opportunity to invest in a pure play industrial fund, closed early; fully subscribing in just over two weeks after the offer opening. Oyster Industrial Limited’s first two acquisitions were the newly developed 101 McLaughlins Road and 12 Harbour Ridge Drive in Wiri, Auckland.
The $17.9 million equity raise attracted strong demand from both existing and new Oyster investors, according to Oyster’s Capital Sourcing Manager, Rich Lyons.
“More than 40% 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 the recently developed industrial properties.”
Lyons says 47% of investors originated from Auckland, with Bay of Plenty and Waikato investors combined providing a further 30% of the equity.
Oyster Industrial Limited, which was marketed by Oyster in conjunction with Colliers International, forecasted to provide investors with a pre-tax cash return of 5.25% per annum, paid monthly. A total of 358 individual $50,000 parcels of shares were made available.
The properties are modern, high-quality, design-built industrial assets, with a combined value of $31.6 million. They are both located in the sought-after industrial precinct of Wiri, Auckland.
Mark Schiele, Oyster’s Chief Executive, believes the offer had several attributes which had immediate appeal for investors.
“There has always been strong investor demand for well-located commercial properties, with quality occupiers on long leases. That, combined with the proven performance of the industrial property sector and the projected pre-tax cash return, satisfied investor criteria.”
“We’re very pleased with the speed of the equity raise which reinforces investors’ significant appetite for high-quality commercial property. With the low interest rate environment continuing to impact returns from bank deposits and bonds, investors are seeking stable alternative options for yield. Commercial property investments remain an attractive proposition and many see the lower volatility and monthly distributions common in unlisted property, as particularly appealing.”
The Oyster Industrial Limited properties currently return just under $1.5 million in net annual income from a combined 11,858m² of lettable area.
The properties were settled by Oyster Industrial Limited on 21 October 2019. Oyster will manage the properties and Oyster Industrial Limited as part of their wider national portfolio of $1.7 billion of commercial property assets under management.