Brisbane-based Cromwell Property Group has acquired a 50% interest in New Zealand property & fund manager Oyster Property Group Ltd.
Cromwell is a larger-scale, ASX-listed version of Oyster, holding an $A2.3 billion property portfolio and running an $A1.2 billion funds management business.
Oyster, formed by Hamilton-based Mark Winter & Heather Coyne in 2004, has $650 million of property assets under management through a combination of 24 private property syndicates and institutional property management mandates, including the 3 Dress-Smart outlets, now owned by Lend Lease Corp.
Oyster chief executive Mark Schiele said yesterday the partnership with Cromwell would enable the company to acquire larger institutional-grade assets over time and to build the scale of the business, as part of its long-term strategy to significantly accelerate growth.
Typically before Cromwell’s arrival, Oyster limited itself to investments up to $25 million. Its next syndicate will be for the NZ Racing Board building in Petone, bought for $10.5 million. Oyster will look to raise $6.7 million from investors, but hasn’t issued a prospectus yet.
Cromwell will acquire a 50% stake in the Oyster business for an initial payment of $5 million, with a further $2.5 million payable over the next 2 years upon achieving targeted financial performance. Outperformance payments are also possible over the same period.
The remaining 50% will continue to be owned by Oyster directors Mr Schiele, Gary Gwynne & Mark Winter, along with fellow shareholders Graeme Edwards, Nigel Powell & John Bougen.
Auckland-based Cromwell director Michelle McKellar will chair the new board, which will also include Cromwell funds management director Daryl Wilson and another senior executive, Michael Blake.
Cromwell chief executive Paul Weightman said Oyster had many similarities to Cromwell and would provide a solid platform for the group’s expansion into New Zealand. He said New Zealand’s economic recovery reinforced Cromwell’s already optimistic view about the opportunity to grow its presence in the country.
“Recent economic data suggests New Zealand is entering a new period of strong, sustainable growth. We believe we have the right partner, at the right time, to take advantage of these conditions and build a solid, profitable business.”
Cromwell has historic New Zealand ties – in the 1980s, NZSX-listed Corporate Investments Ltd, headed by Peter Masfen, created an associated listed company, Corporate Equities Ltd, to invest in Australia. Corporate Investments survived, evolving into wine company Montana Group (NZ) Ltd, and Corporate Equities went through a couple of changes before turning into Cromwell with a recapitalisation in 1998. It still has a number of New Zealand based securityholders.
Attribution: Company releases, phone interview, Companies Register.