Oyster are pleased to present you with the first capital raise for the Oyster Large Format Retail Fund. The Fund has been established as an open-ended unlisted property fund with the aim to grow through further acquisitions, a stable and diversified portfolio of Large Format Retail property.
This offer provides a forecast pre-tax cash distribution of 5.00% per annum, payable monthly, for the period to 31 March 2023. The minimum investment is $50,000 for parcels of 50,000 shares and parcels of $50,000 thereafter. Oyster Management Limited is the manager and issuer of the units in the Oyster Large Format Retail Fund.
The Fund’s targeted investments will provide tenant and property diversification within the Large Format Retail sector, a strong performing, resilient, asset class. The Fund will have a particular focus on properties anchored by supermarkets, DIY/hardware and bulk retail stores. A key objective for the Fund will be to deliver a stable monthly income to investors whilst providing the potential for long-term capital gain. The total returns generated by the Large Format Retail subsector in the last twelve months has outperformed all other commercial property asset classes. Total core retail spending has reached record highs in the past twelve months and a significant contributor has been DIY/hardware stores, recreational goods outlets, electrical and electronic good retailers and supermarkets with many of these operations able to trade through higher COVID-19 alert levels or provide click and collect services. Occupancy, specifically in the Large Format Retail sector, experienced little change over the course of 2020, with Auckland vacancy rates remaining at extremely low levels of 1% at the end of December 2020.
With changing consumer habits and the growth of online retail, some secondary shopping locations and strip retail precincts have been impacted however Large Format Retail premises, both standalone and premises which offer a wider range of products and convenience, have retained high levels of consumer appeal.
The Fund has initially acquired Albany Lifestyle Centre, located at 260 Oteha Valley Road, Albany, Auckland. The property is a high profile 1.8-hectare site with three road frontages which provides easy access to State Highway 1. The property has a weighted average lease term of 7.69 years (as at 30 April 2021) and provides a diversified tenant mix, anchored by a Mitre 10 MEGA (remaining lease term of 12 years), providing a total gross lettable area of 26,687m2. In addition to Mitre 10, the property is leased to nine Large Format Retail tenants including new leases to Freedom Furniture and Dankse Møbler as well as two office tenants. Due to the strong investment fundamentals of the Large Format Retail asset class, the tenant mix of the initial property, specifically the anchor tenant Mitre 10, and the objective of growing the Fund and diversification through further acquisitions, we believe this offer will be highly sought-after by investors
The Fund is managed by Oyster Management Limited, a leading New Zealand commercial property fund manager. Oyster manages a range of retail, office and industrial assets throughout New Zealand, with a combined value in excess of $2 billion. This PDS contains important information about this offer.
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