Oyster serves up investment pearl

By Colin Taylor

Syndicator seeks investors at $100,000 apiece for large East Tamaki opportunity

Oyster Group is offering 114 units for $100,000 each on the 2.3ha site zoned Business 6 at 100 Harris Rd.
Oyster Group is offering 114 units for $100,000 each on the 2.3ha site zoned Business 6 at 100 Harris Rd.

Property syndication specialist Oyster Group, which recently acquired 100 Harris Road in East Tamaki, is promoting its latest proportionate ownership scheme to investors.

The group purchased on a lease-back basis the VIP Packaging facility in East Tamaki, accommodating over 16,000sq m of lettable area on a 2.3ha site zoned Business 6.

Oyster Group is offering 114 units at $100,000 each and projecting annual pre-tax returns of 8.5 per cent.

It purchased 100 Harris Rd for $21,037,500 representing a yield of 7.26 per cent and will fund the acquisition with equity raised through the subscriptions as well as a bank loan.

Mark Schiele, Oyster Group's managing director, says he expects subscriptions to be fully subscribed ahead of the October 3 deadline.

"We expect inquiry from a balance of both our existing clients and new investors who are looking for an opportunity to invest in the industrial property sector," Schiele says.

CBRE South Auckland brokered the deal on behalf of the Australian firm which is selling a wider Australasian portfolio of properties on a lease-back basis.

CBRE's associate director Tim Boyle says a $1,527,997 annual triple net lease will be paid by VIP Plastic Packaging (NZ) beginning on a 12-year term as of the settlement date with annual fixed growth of 3.5 per cent.

The lease is secured by a guarantee to parent company PACT Group and has one further right of renewal for five years.

"The triple net lease structure, not uncommon with lease-back scenarios of complex manufacturing business, also gives the investors the peace of mind around any deferred maintenance issues or ongoing capital expenditure as this is all borne by the tenant," Boyle says.

"A quality investment product of this scale is rarely available in the current market and has produced a lot of interest.

"To have a vendor offering a long term lease-back on such favourable terms, and with built-in rental growth meant that we would be kept busy fielding inquiries."

VIP Packaging is a wholly-owned subsidiary of large Australian multi-national packaging company PACT Group, which owns a range of plastics and metal packaging businesses operating from 60 sites throughout Australia, New Zealand, Singapore and Thailand.

Schiele says that "the demand for proportionate schemes is as strong as ever".

Oyster Group syndication offerings over the past 12 months have included Mitre 10 in West Auckland and Orion Healthcare in Auckland Central.

"We've had a lot of unsatisfied demand from our existing clients and 100 Harris Road meets all the criteria for both our clients and new investors we are hoping to attract to this offering."

The property is described as a well-constructed, full drive-around industrial facility housing VIP Packaging's considerable plant which was recently upgraded to ensure the packaging facility met the highest standards required by the food packaging industry.

The complex serves as both a manufacturing facility and a storage and distribution hub for several Auckland based PACT Group businesses.

Bruce Catley, managing director of CBRE's South Auckland office, says some parts of East Tamaki are experiencing exceptional growth due to the development of the Highbrook Business Park.

"We believe this growth will continue throughout the area and expand through to Wiri," Catley says.

"There is considerable demand for industrial property at the moment.

"Its resilience during the global financial crisis has highlighted the fact that many portfolios are under-weighted from an industrial perspective.

"To be able to obtain a large facility of this nature, on the favourable lease terms secured is a real coup," Catley says.

- NZ Herald

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