Oyster Property Group Ltd’s syndication of the Cider building in Ponsonby has closed fully subscribed after only a week as all 50 $1 million interests were taken up.
The syndicator offered investors a projected 7.5%/year pretax return from a property investment anchored by a Countdown supermarket on a 20-year lease to Progressive Enterprises Ltd subsidiary General Distributors Ltd.
Oyster contracted to buy the Cider building, on the corner of Williamson Avenue & Pollen St in Ponsonby, from Progressive at a yield of 6.74%, equating to a purchase price of about $93 million. Settlement is due in June.
The syndication, marketed only to wholesale investors in conjunction with Tim Lichtenstein & Charlie Oscroft of Colliers’ syndications division, was Oyster’s largest.
Chief executive Mark Schiele said yesterday: “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 & funds management business.”
Construction of the 13,200m² retail & office development is nearing completion. It comprises a new 4000m² Countdown supermarket, 8000m² of office space on 3 floors, 11 specialty retail tenancies over 900m² along Williamson Avenue & Ponsonby Rd, and about 520 basement parking spaces.
Fairfax NZ Ltd has taken a 12-year lease on the office space.
The Vinegar Lane half of the site, a mix of homes & offices, has been developed separately and won’t be owned by Oyster. Occupants include architects, designers & engineers. It has apartments on the top floors.
14 March 2016: Oyster to syndicate Cider property to wholesale investors
Attribution: Company release.