Oyster Industrial Limited is seeking about $26 million from investors for its recent purchase of a large scale-food production facility in Kaiapoi, Canterbury. Investors can access the fund for a minimum investment of $59,500.
Oyster chief executive Mark Schiele says industrial property has been an outstanding performer over the past 15 years, and this reliability and consistency as an asset class helps it stand out in this environment.
There’s ongoing high demand for industrial and logistics space due to the tight rental market and pandemic-related trends and global supply chain issues, Schiele says.
He puts this down to three key fundamentals.
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“You already have a couple of decades of growth in online commerce, and shopping requires logistics facilities for those goods to be stored before they're delivered to your home. The pandemic has further hastened the global trend towards online shopping.”
That strong demand from occupiers is combined with an underlying scarcity of land a limited supply of flat, appropriately zoned properties around major population centres, and transport hubs and corridors.
“The other thing that's occurred more recently due to the pandemic and significant global logistics cost and time increases, is that demand for both storing product in New Zealand and, in some cases, manufacturing onshore has soared,” says Schiele.
Oyster has been operating in New Zealand commercial property for nearly 25 years. It is vertically integrated – sourcing and adding value as well as managing properties in its funds. “We have a deeply experienced team that knows what it is doing, so our investors don’t have to be experts themselves.”
The company, which owns and manages more than $2.1 billion worth of property for about 2500 investors, has opened its fourth equity raise for Oyster Industrial since opening in 2019. The portfolio consists of six existing storage, production and distribution locations in Auckland and Wellington.
Its quality tenants include the likes of Downer, Plumbing World and Cardinal Logistics. It’s most recently acquired property is fully leased to Hellers Limited, New Zealand’s leading brand of processed meats, and it serves as its main New Zealand headquarters.
While acknowledging that past performance is no indicator of future performance, the fund has achieved an annualised total return of 11.1 per cent since its inception.
In addition, the fund’s portfolio investment entity (PIE) structure offers the potential for tax advantages due to its highest prescribed investor rate being 28 per cent.
Oyster chief executive Mark Schiele. Photo / Supplied.
Schiele says commercial property funds are increasingly on the radar of those who can’t afford to buy a house or invest in residential property, even amid current residential property price dips, and who wish to avoid stock market volatility seen in recent years – and industrial property is usually at the top of the list.
“Industrial real estate is an asset class with multiple compelling benefits to people of all age brackets with different investor profiles - from older people who want to make their capital work for them to produce monthly returns, to newer investors who may be locked out of the housing market and are looking to earn while they save to grow their wealth. Commercial property is also attractive from the perspective that it offers the opportunity for capital gains and is a way to strengthen and diversify an investment portfolio. Oyster also has a number of other funds or separate structures across the industrial, office, large format retail and retail property sectors in which people can invest for as little as $10,000.
“As an asset class, the ability to invest in substantial commercial property is the challenge. “Typically, commercial property is not as widely understood as residential investment but provides investors with a similar ‘bricks and mortar’ style tangible investment that, through a fund, can provide a regular monthly income and the potential for capital gains.
“One of our missions is to provide an easy way for people to invest. With Oyster, you can own a stake in quality commercial properties without the deposits, hefty outlay, red tape and hard yards associated with buying and managing the assets yourself.
“You can access assets of scale that are normally out of reach,” says Schiele.
Against challenges posed by rising interest rates, inflation and record low unemployment, a stable asset class with strong fundamentals including growing occupier demand, and the ability to grow rental, is keenly sought, Schiele says.
“Industrial property has been particularly resilient for many years and is particularly well placed to capitalise on pandemic-related change.”
You can get a Product Disclosure Statement for Oyster Industrial by registering your interest at oystergroup.co.nz/oil. Oyster Industrial Limited is the issuer of the shares.
Oyster is a leading New Zealand commercial property and fund manager with expertise in property fund structuring and equity raising.
For more information visit: oystergroup.co.nz/invest.
