Oyster to syndicate Albany tech hub

The building at 33 Corinthian Drive, Albany, houses the ASB's C:Drive tech hub. Photo / Supplied

An Auckland award-winning technology and innovation hub is to be offered for syndication by property and funds manager, Oyster Property Group, with a projected pre-tax cash return of 6.5 per cent per annum.

The ASB's C:Drive tech hub is housed in an institutional-grade office investment property at 33 Corinthian Drive, in Albany on the North Shore.

It was purpose-built for ASB Bank Limited in 2001 and is fully tenanted by ASB on a nine-year lease until 2025, with rights of renewal, if exercised, taking the final lease expiry through until 2043.

The 10,248sq m property houses the technology and innovation hub in a three-level complex on a high-profile 2.12ha freehold site.

Featuring a striking design along with functionality, C:Drive has won numerous national and international architectural and innovation awards, including the global Architectural Review's AR Award.

Oyster Property Group proposes to offer investors the opportunity to acquire a share of, and beneficial interest in, C:Drive's land and building through a proportionate ownership scheme.

The scheme, which will be marketed by Oyster in conjunction with Colliers International's syndications team, comprises 585 interests of $50,000 each.

Oyster's Chief Executive, Mark Schiele, says the company leapt at the opportunity to acquire C:Drive late last year due to its outstanding fundamentals.

"The large landholding is exceptionally well located; the building is significant both in terms of size and design; and the lease with ASB provides a long tenure with fixed rental growth," he says.

"The sole tenant, ASB, is a 'big four' New Zealand bank that is wholly owned by the Commonwealth Bank of Australia.

"It is one of New Zealand's largest providers of financial and insurance services, with more than 1.6 million customers.

"The bank is also highly profitable, having grown its after-tax profits by 10 per cent in the year ending June 30, 2018, to over $1.17 billion."

Schiele says ASB's lease earns about $2,971,000 plus GST in net annual rent.

An interior view of the technology and innovation hub. Photo / Supplied

Fixed rent reviews every three years, including on renewal, offer secure rental growth of 2 per cent, compounded annually.

Charlie Oscroft, Colliers International's syndications director, says the property's high-profile location in a growth suburb makes it an attractive proposition.

"C:Drive is superbly positioned within one of three key areas that Auckland Council has earmarked for intensive growth outside the CBD," Oscroft says.

"It is very easy to access, with the Albany Expressway on its western boundary, and is only 18km from Auckland's CBD via the Northern Motorway. In addition, the Northern Busway and its associated park and ride facility provide a good level of public transport for staff.

"The property is also within easy walking distance to New Zealand's fourth largest shopping centre, Westfield Albany, as well as Massey University, one of the largest tertiary education providers.

"Already a focal point for growth, Albany's excellent connectivity will continue to attract further commercial, residential and mixed-use development in future."

C:Drive was designed by BVN Australia, in association with Jasmax, and constructed by the Neil Group.

Oscroft says that, upon its completion in 2001, the innovative property challenged the traditional New Zealand office market in terms of space efficiency and workplace layout.

"The activity-based workspace continues to sit at the cutting edge with its large floorplates and flexible working spaces."

The property has 334 on-site car parks, a gym, badminton court, auditorium and a common area with meeting rooms and a cafe.

It comprises basement, ground and mezzanine floors with a strong visual connection between the levels provided by walkways, voids and open staircases.

The main entrance, on the Northeastern end of the 5647sq m ground floor, leads into a large, open plan office and the main common area, known as Central Park.

The floor opens on to an outdoor courtyard, while two voids overlook the basement theatre and badminton court below. Multiple staircases lead to the basement and mezzanine levels. The 2593sq m basement was used for car parking until 2007, when it was converted to open plan office space.

At the Northwestern end of the basement, there is a small theatre that links to the ground level. The Eastern end includes the badminton court, enclosed gym, shower facilities and female and male amenities plus service areas. Two sets of stairs and one lift provide access to the ground level above.

The 1954sq m mezzanine levels include multiple walkways over the Central Park area of the ground level. This level has multiple meeting rooms, together with further open plan office areas, plus a lunchroom and kitchen area.

Car parking is provided on grade around the building as well as in a two-level car park structure at the Southeastern corner of the site.

Schiele says the syndication should have broad appeal to a wide range of investors.

"The scheme will be open to retail investors, which means it isn't restricted solely to wholesale or eligible investors, as many similar syndication schemes are. This gives investors the comfort of an extra level of regulatory oversight and also opens up the scheme to a wider investment community."

Individual investors will be able to apply for one or more interests in the scheme and are projected to receive a pre-tax cash return of 6.5 per cent return per annum, for the financial year to March 31, 2020, to be paid monthly.

The scheme will be managed by Oyster, which is one of New Zealand's leading commercial property fund managers. The company has expertise in property fund structuring and equity raising, and currently manages over 20 property funds for retail and wholesale investors including the diversified Oyster Direct Property Fund.

Oyster manages a range of retail, office and industrial assets throughout New Zealand, with a combined value in excess of $1.5b.

No money is currently being sought and interests in the scheme cannot be applied for or acquired; but will be offered in accordance with the Financial Markets Conduct Act 2013.

Investors interested in the 33 Corinthian Proportionate Ownership Scheme can request a copy of a Product Disclosure Statement (once registered) from Oyster or Colliers without any obligation or commitment to acquire an interest.