An artist's impression of the completed Cider building on the corner of Williamson Ave and Pollen St, Ponsonby.
An artist's impression of the completed Cider building on the corner of Williamson Ave and Pollen St, Ponsonby.
Commercial fund and property manager, Oyster Group, has announced it has entered into an unconditional agreement to purchase the Cider building on the corner of Williamson Avenue and Pollen Street in Ponsonby.
The high profile property is due for completion next month and is a 13,200sq mixed use retail and office development.
Oyster is purchasing the property based on a yield of 6.74 per cent equating to a purchase price of about $93 million with settlement due in June this year.
The property is being developed by Progressive Enterprises and will be anchored by a new 4000sq m Countdown Supermarket on a 20-year lease. The building also encompasses 8000sq m of office space across three floors, about 520 on-site basement carparks and 11 specialty retail tenancies with over 900sq m of floor space facing Williamson Ave and Pollen St.
Cider will be 100 per cent leased to General Distributors Limited (Countdown), Fairfax NZ Limited on a 12-year lease and convenience retail.
Mark Schiele, Oyster's chief executive officer, says the purchase is significant for the company and the property will ultimately constitute Oyster's largest multi-investor ownership structure.
"Cider is an outstanding mixed use development which has been extremely well executed by Progressive Enterprises in terms of its design fit in the Ponsonby area. As a landmark development project in Auckland, it made good commercial sense for Oyster to acquire the property and to create an investment structure for it."
Schiele says a total of 50 interests of $1 million each will be made available to wholesale investors, with a projected pre-tax return of 7.5 per cent per annum. An information memorandum will be available to interested investors from April.
"Property ownership structured for wholesale investors continues to be an important part of Oyster's business, alongside public syndication offers and the company's recently announced Oyster Direct Property Fund which will offer investors diversified exposure to $240 million in quality New Zealand commercial property," Schiele says.
He says the site is one of Auckland's first real mixed use developments. "The neighbouring Vinegar Lane - a tribute to the old DYC vinegar factory which stood on the site - will not be owned by Oyster but is part of the greater development accommodating a range of occupiers including architects, designers and engineers along with high quality apartments on the top floor."
Jonathan Ogg, CBRE.
Jonathan Ogg, senior director of capital markets at CBRE, who brokered the sale, says the sale of Cider is the largest, city fringe transaction for many years in an area which is demonstrating exceptional growth.
"The Ponsonby market is extremely buoyant at present, with demand for all property types coming from a range of sources.
"The number of apartments in Ponsonby and its neighbouring suburbs is currently over 1200 and over the next few years the supply pipeline indicates this will increase by a further 25 per cent. This growth underpins the relevance of Cider as a trophy asset with strong yield potential, as well as the retail and office markets going forward."
Adrian Walker, Progressive Enterprises' general manager of property, says the sale of the distinctive site is a great result for the business.
"From the outset, we knew this development would be an attractive offering for buyers given its great location and potential for future growth.
"We are not long-term property holders and would prefer to lease sites we have developed for our own supermarket use. The sale and lease of this property will allow us to generate capital which we can then reinvest in growing our business."
