Oyster's C:Drive tech hub offer closes early

The institutional-grade office investment property at 33 Corinthian Drive. Photo / Supplied

Oyster Property Group's latest proportionate ownership scheme, offering investors an opportunity to invest in the ASB's C:Drive tech hub in Albany, has closed early and fully subscribed just over two weeks after opening.

The institutional-grade office investment property at 33 Corinthian Drive was purpose-built for ASB Bank Limited in 2001. It 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.

Oyster's CEO Mark Schiele say the $29.25m equity raise attracted strong demand from both existing and new Oyster investors.

"One third of investors who participated in the offer were new to Oyster. The minimum investment of $50,000 opened the opportunity to a large pool of investors, and we were delighted to see so many new investors wanting ownership in a quality commercial property with a tenant of this calibre."

The syndication scheme, which was marketed by Oyster in conjunction with Colliers International, is forecast to provide investors with a pre-tax cash return of 6.5 per cent per annum, paid monthly. A total of 585 individual $50,000 interests were made available.

The property, a large scale three-level standalone office building valued at $54m, is located at the heart of Albany on Corinthian Drive and is 100 per cent leased to ASB Bank Limited.

Schiele believes the offer had several attributes which immediately appealed to investors.

"There has always been strong investor demand for quality commercial property which has outstanding tenant covenant and long-term leases. That, combined with the sought-after Auckland location and the projected pre-tax cash return, satisfied investor criteria."

"We're obviously very pleased with the speed of the equity raise which reinforces investors' significant appetite for high-quality commercial property. With historically low interest rates remaining on the horizon, investors continue to seek alternative options for income, and commercial property returns are increasingly seen by many as attractive."

Schiele says 55 per cent of investors originated from Auckland, with Bay of Plenty and Waikato investors combined providing a further 25 per cent of the equity.

The C:Drive property currently earns just under $3m in net annual income.

The property was settled on April 1 with Oyster managing the property and the syndication scheme as part of its wider national portfolio of commercial property assets under management worth $1.5 billion.