Auckland, 21 September 2013 - Property syndication specialist Oyster Group who recently acquired 100 Harris Road in East Tamaki and will be promoting its latest proportionate ownership scheme to investors over the coming weeks.
The group successfully purchased the VIP Packaging facility in East Tamaki, a large site accommodating over 16,000sq m of lettable area on a 2.3ha Business Zone 6 site. VIP Plastic Packaging is a wholly owned subsidiary of large Australian multi-national packaging company PACT Group. They own a range of plastics and metal packaging businesses currently operating in 60 sites throughout Australia, New Zealand, Singapore and Thailand.
Oyster Group is offering 114 units at $100,000 each and projecting annual pre-tax returns of 8.5%. Oyster purchased 100 Harris Road for $21,037,500 representing a yield of 7.26% and will fund the acquisition with equity raised through the subscriptions as well as a bank loan.
Oyster Group Managing Director, Mark Schiele, says that “demand for proportionate schemes is as strong as ever.” Oyster Group offered subscriptions over the last twelve months including Mitre 10 in West Auckland and Orion Healthcare in Auckland Central. Schiele comments, “We had a lot of unsatisfied demand for quality investment opportunities from our existing clients and 100 Harris Road met all the criteria to both clients and investors we are hoping to attract through this offering”
The property itself is a well-constructed full drive-around industrial facility that houses the VIP Packaging’s considerable plant. It has recently been upgraded to ensure the food-grade packaging facility meets the highest standards required by the food industry. The property serves as both; a manufacturing facility, as well as storage and distribution hub for several Auckland based PACT Group businesses. East Tamaki is experiencing exceptional growth over recent years in some parts due to the large Highbrook Business Park, this growth will continue throughout the area and also expand to Wiri.
CBRE South Auckland brokered the deal on behalf of the Australian vendor, who was selling a wider Australasian portfolio of properties on a lease-back basis, were happy with the final outcome. CBRE Associate Director Tim Boyle comments, “A quality investment product of this scale is rarely available in the current market and produced a lot of interest throughout this campaign. 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 busy”
The $1,527,997 annual Triple Net lease to VIP Plastic Packaging (NZ) Ltd commences on a 12 year term as of the settlement date and has annual fixed growth of 3.5%. 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.
Bruce Catley, Managing Director of CBRE’s South Auckland office confirms “there is considerable demand for Industrial property at the moment. It’s resilience over the GFC has highlighted the fact many portfolios are under-weight from an Industrial perspective. To be able to secure a large facility of this nature, on the lease terms secured is a real coup” The lease is secured by a guarantee to parent company PACT Group Pty Limited and has one further right of renewal for five years.
Mark Schiele expects the subscriptions to be fully subscribed ahead of the seven week promotional deadline on the 3rd of October 2013. “We expect a balance of both our existing clients and new investors who are looking for an opportunity to invest in the industrial property sector”
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.