Schiele says a combination of elements attracted investors, including the location, length of lease, projected return and built-in rental growth - all investment criteria which form part of Oyster's acquisition strategy.
This was the first syndication Oyster has undertaken with a minimum investment of $50,000. Oyster's previous syndications have required a minimum $100,000 investment.
Schiele says this was done to open up the opportunity to a greater pool of investors, and it appears to have been successful with many investors new to Oyster having participated.
Oyster has hit the market this year with its new syndication offering of the ANZ Business Centre in Albany.
Schiele says the $27 million ANZ Business Centre at 9 Corinthian Drive in Albany is also generating considerable interest from investors. Oyster is making 312 interests of $50,000 each available, projecting pretax cash returns of 8.25 per cent to be paid monthly. ANZ, the anchor tenant, has entered into a new nine-year lease, with a further six-year right of renewal, in the modern five-level office building.
"There is no doubt appetite among investors for commercial property is growing significantly and syndications or proportionate ownership schemes are proving an increasingly popular and accessible way for individuals to enter the market," Schiele says.
"In proportionate ownership schemes, investors buy 'interests' in commercial properties of significant scale which might otherwise only be the domain of high net worth individuals or institutional investors."
He believes demand for proportionate ownership schemes is growing at a fast rate in New Zealand for a variety of reasons.
"New Zealanders are typically attracted to 'bricks and mortar' investments but clearly investing in large format office, industrial and retail commercial properties is beyond the means of most." However, syndicated property investment structures allow investors with a relatively modest level of capital to invest in a specific commercial property which appeals to them and benefit from monthly income distributions.
"Commercial property returns are also seen by many investors as a very attractive complement to lower bank deposit rates and well-located assets have proved robust through changing economic cycles."
Schiele says proportionate ownership of commercial property also continues to be attractive for groups of individuals looking to passively invest in assets of significant value and scale without any of the hassle of day-to-day management because all the work is done by the professional management company.
"Because the properties are fully managed, investors do not need to be experts in strategically evaluating, owning and managing buildings and tenants and many investors invest across a number of syndicates.
"Oyster has a track record of performance through a disciplined approach to managing property and investors' funds. A recent partnership with Cromwell Property Group is helping the company to build scale."
In June last year, Cromwell Property Group, one of Australia's leading property investment and funds management groups, acquired a 50 per cent interest in Oyster Group. ASX-listed Cromwell holds a property portfolio valued at $2.3 billion, and a funds management business with $1.2 billion of assets under management.
Oyster manages over $700 million of property assets through private and institutional mandates.
