Building shares up for sale

By ANNE GIBSON

The former head of Bayleys Waikato has started a new property investment company and says his departure from the firm was "a blessing in disguise".

Former franchisee Mark Winter has launched a new business specialising in proportionate ownership schemes and says he has learned from mistakes.

He wants investors to buy into a new scheme to own a share of a building on the corner of Great South Rd and Greenlane Rd in Auckland, where he is projecting an 8.67 per cent return.

Winter's new company, Oyster Property Group, is offering investors 75 units in the office building for $100,000 each and although the offer was launched only about a week ago Winter said he had already sold 10 units.

"We're confident the investment will be oversubscribed before closing on August 20."

These offer documents come with a comprehensive valuation report, even though Winter was "still not convinced it is necessary".

Winter's high-profile departure from Bayleys Waikato earlier this year followed the issue of another proportionate property investment scheme, this time for the James Smith Carparking building in Wellington. But a complaint to the Securities Commission about the way the offer was made forced Bayleys to return $13 million to investors and reissue the offer, this time with a valuation report.

Bayleys was found to have acted in a dual role as the seller of the building and the real estate agent through which the offer was made.

Winter said the building at the heart of his new offer was at 205 Great South Rd and was owned by developers Watts Group but he had made a conditional offer of $13,818,000 to buy it.

He wants to raise $7.5 million from investors and fund the balance of the planned purchase with bank debt. Settlement is due in early September and is dependent on the outcome of the offer.

Investors are being offered a fully managed cash return of 8.67 per cent, exclusive of depreciation tax benefits, payable monthly.

Known originally as the Mazda building, the property situated on a 3997sq m site was newly reconstructed last year.

Tenants include the Ministry of Social Development, Public Trust, Auto Auction Network, Auckland Colour and Design (trading as Levenes) and Watts Group.

Winter said he opened the Bayleys Waikato office in 1991 and, last year, the business sold more than $300 million worth of property.

The Hamilton office was the first Bayleys operation to be franchised and was one of the firm's top-performing offices.

Winter said he had been involved in seven proportionate ownership investments totalling $90 million during his time at Bayleys and described the commission case as "an initial setback" but said the revised offer was quickly oversubscribed, well before the closing date.

The timing of his departure from Bayleys was good in terms of the health of the property market. Winter has been re-elected for a second term as president of the Real Estate Institute's Waikato/Bay of Plenty and Gisborne districts.

Oyster has a property investment portfolio worth more than $150 million, 30 properties with 124 tenants, 67,300sq m leasable floor area and 230 investor clients.