Update - In this issue CEO Update Tauranga Crossing Shopping Centre Your Investment Questions Answered Economic Overview C:Drive Offer Closes ...
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OYSTER UPDATE | 1
JULY 2019
Update
In this issue
CEO Update
Tauranga Crossing Shopping Centre
Your Investment Questions Answered
Economic Overview
C:Drive Offer Closes Early
OYSTER UPDATE | 1
Welcome to
Oyster Update.
It’s been an interesting and
busy first half of 2019 for Oyster.
on the transactions front, we have settled three term deposits is causing many investors to consider
property purchases and have a healthy pipeline ahead. alternative asset classes such as commercial property.
We look forward to announcing further investment Oyster remains aware of the cyclical nature of our
opportunities in 2019. property markets; with this, delivering stable monthly
We are pleased to advise that the Oyster Direct returns with the potential for long-term capital growth
Property Fund (DPF) re-opened from 1 May 2019 and has remains at the forefront of our investment decisions. Land
recently purchased two adjoining industrial properties value, location, building age and construction, transport
in Wellington; 6 Hurring Place and 12 Newlands Road. links, surrounding amenity, strength of tenants, and
Since inception to 31 March 2019, the fund has delivered lease terms all play a significant part in the performance
an annualised total return of 13.85% (pre-tax) and, with of commercial property. We believe investors still take
the continued addition of further property investments, comfort in bricks and mortar investments and, the
we are finding the DPF’s diversification is particularly unlisted nature of our investments, provide more frequent
appealing to investors. distributions and remove sentiment related volatility.
We are delighted to have played our part in both the On behalf of the Oyster team, we thank you for your
development and asset management of Tauranga Crossing ongoing commitment to Oyster and look forward to
since it first opened nearly 3 years ago. The recent April presenting you with new investment opportunities over
2019 opening of 45 new stores, 17 new dining options the balance of the year.
and an 800-seat cinema within the enclosed mall has
cemented Tauranga Crossing as a dominant destination
within the Bay of Plenty region. Within the first four days
of opening, the centre attracted over 70,000 visitors; a
testament to its appeal.
Last month the Reserve Bank lowered New Zealand’s MARK SCHIELE
official cash rate, and the continued impact on maturing Chief Executive Officer
2 | OYSTER UPDATE OYSTER UPDATE | 3
SHAREE AITKEN
Investor Relations
e: sharee.aitken@oystergroup.co.nz
t: 0220 100 801
Tauranga Crossing Your Investment
Shopping Centre Questions Answered
at oyster, investor relations is at the application processes, and everything in between.
2 TAURIKURA DR, TAURIKO, TAURANGA forefront of our service offering. We know our Investor Relations collaborates with key
investors always have a choice on how they members of our team to ensure the delivery of
located in new zealand’s second fastest by Pak’nSAVE, The Warehouse, Warehouse choose to invest and who they wish to invest investment information is accurate and timely.
growing city, Tauranga Crossing is the newest Stationery, Noel Leeming and 20+ specialty with, and we don’t take this for granted. Our dedicated Investor Team welcomes your
and largest shopping centre in the Bay of retail tenancies. Stage 2A, which is the first We aim to provide you, our investors, feedback, suggestions or concerns as we continue
Plenty region. The centre has over 100 stores, part of a fully enclosed shopping mall, was with everything you need, whether that be to grow our relationship with all our investors.
restaurants and eateries including H&M, completed in October 2018 and accommodates financial reporting on your investment, existing If you wish to reach out to the team, please do
Event Cinemas, Pak’nSAVE, The Warehouse, 20+ specialty retailers over 6,700m 2. investment and property queries, assistance with not hesitate in contacting Sharee Aitken.
Gilmours and Farmers. Home to these 6 Stage 2B recently had its grand opening in
major tenants, 4 mini major tenants and April 2019, when the centre opened its doors
approximately 104 specialty retailers, the to 45 new stores, 17 new dining options and an
development of Tauranga Crossing comprises 800-seat cinema. The $150 million development
houses some of Tauranga’s newest stores
including global fashion retailer H&M, lingerie The key role of Investor Relations is to manage:
store Bras N Things, City Chic and Skechers.
Tauranga Crossing has over A two-level dining area and entertainment
100 stores, restaurants and precinct, featuring an Event Cinema complex
and Vmax screen with full recliner chairs and
Distribution and Registration for future offers
eateries including H&M, double day beds is also within the shopping
payment queries and re-sale opportunities
centre. Over 20,000 people visited on the
Event Cinemas, PAK’nSAVE, opening day, Thursday 4 April, which is 13% of
Tauranga’s population of 135,000. Over 70,000
The Warehouse, Warehouse people had visited the centre as of the end of the Financial reporting Oyster’s latest offers and
Stationery, Gilmours and day, Sunday 7 April.
and timeframes additional queries
Stage 3 is a future stage of an additional
Farmers. 11,000m 2 of development land. The Lifestyle
Centre provides large format home and lifestyle
stores, which is currently occupied by Gilmours, Existing investment Transferring, re-selling or
Farmers and Bed, Bath & Beyond. Future
and property queries redeeming of investments
of Stage 1, Stage 2, Stage 3 and the Lifestyle expansion is planned for the Lifestyle Centre.
Centre, which equates to 45,194m 2 of gross On completion, the 47,0002 m shopping
lettable area and 1789 car parks. centre will house up to 70 fashion, general
Assistance with the
Stage 1, which was completed in 2016, is a merchandise and service retailers, and also Co-ordination of
17,500m 2 externally trading centre, anchored creates 1000+ jobs inside the mall. application process
investor meetings
4 | OYSTER UPDATE OYSTER UPDATE | 5
INDUSTRY INSIGHT TEAM PROFILE
Mark Hitchcock
Economic Development Manager
Overview BY NICK TUFFLEY
Chief Economist, ASB
BY RICH LYONS
Capital Sourcing Manager
As DEVELOPMENT MANAGER, Mark’s key
focus at Oyster involves identifying and
C:Drive Offer
the economy is chugging along at a moderate pace, But there are challenges. Business confidence remains executing value-add and re-development
taking longer than expected to regain momentum lost woefully low through a combination of challenges in opportunities across the Oyster portfolio;
over 2018. We expect growth will start to gradually pick finding suitable staff, cost pressures, and continued at present, this includes office, industrial
Closes Early
up over the second half of 2019, which should be aided uncertainty around government policies. One source of and retail (including hospitality / food and
by the Reserve Bank (RBNZ) stepping in to deliver more uncertainty, the potential imposition of a broad-based beverage precinct) development schemes.
stimulus. capital gains tax, has at least been taken off the table – but Mark has established a team at Oyster that
The global economy is cooling after a period of above- not before generating a burst of business angst. includes Project Management and Retail
average growth. Growth for 2019 and 2020 is expected With recent economic growth modest, inflation and oyster’s most recent proportionate of $50,000 opened the opportunity Delivery (design management and tenancy
to be below average. And, unhelpfully, the big distracting wage pressures muted, and with some slack within the ownership scheme, offering to a large pool of investors, and we co-ordination) services, further supporting
sideshows of the past year remain: US-China trade labour market, it is clear the economy has scope to grow investors the opportunity to invest were delighted to see so many new in-house project implementation in close
tensions and the UK’s dysfunctional Brexit process. The faster. We expect a further Official Cash Rate cut in the in C:Drive, 33 Corinthian Drive, investors wanting ownership in a collaboration with the Asset and Facility
first of these is the more serious one, with increasing risk second half of the year, to a record low of 1.25%. Although Albany, Auckland, closed early, fully quality commercial property with a Managers.
of tit-for-tat measures that slow the world’s two biggest that further cut isn’t a done deal, at the least interest rates subscribing in just over two weeks tenant of this calibre.
are going to remain very low and supportive for some time There has always been strong Mark has 15 years of both national and
economies. after the offer opening date.
yet. investor demand for quality international experience in property
Domestically, there are still some good drivers. The $29.25 million equity raise
One factor that will change the borrowing landscape commercial property which has development, project delivery, commercial
Export prices remain high, notwithstanding the softening attracted strong demand from both
is the RBNZ’s proposed increases in bank capital outstanding tenant covenant and property management and leasing.
of global growth, and we remain positive about the existing and new Oyster investors
export price outlook. Interest rates are historically low. requirements. These are likely to gradually push up and is forecasted to provide a pre-tax long-term leases. That, combined
Prior to joining Oyster, he was Principal
Population growth is still fairly strong and the 2019 Budget borrowing rates, eventually offsetting the impacts of cash return of 6.5% per annum, paid with the sought-after Auckland
Property Specialist for Auckland Transport
has loosened the fiscal purse strings. the lower OCR. They may also restrain the availability monthly. location and the projected pre-
where he established a portfolio-wide retail
of credit. The finalised capital requirements should One third of investors who tax cash return, satisfied investor
strategy and implementation programme,
be known by the end of November, and their potential participated in the offer were new criteria. The property settled on
which included redeveloping Devonport
impacts better understood then. to Oyster. The minimum investment 1 April 2019.
Wharf and delivering the new Manukau
For commercial property there are a mixture of
Bus Station retail. Mark was also Principal
With deposit rates down influences. The economy is in the late stages of a long
cycle. And asset prices in general have risen a long way
Commercial Development Manager for
C:Drive Geographical C:Drive Investor Transport for London (United Kingdom)
and likely to remain low, already. Yet population growth is likely to remain above
average for a couple more years. Furthermore, this year’s Spread of Investors Breakdown where he led strategic commercial property
development programmes predominantly
the search for yield will drop in interest rates will help keep a floor under property
prices. An acceptable rate of return will be that much
by Investment Value by Investment Value
across the London Underground portfolio,
4% 3% EXISTING NEW as well as embedding commercial property
remain. lower and, with deposit rates down and likely to remain
low, the search for yield will remain.
WELLINGTON
5%
NORTH ISLAND
CHRISTCHURCH
5% SOUTH ISLAND
OTHER
INVESTORS
69%
INVESTORS
31% outcomes into Crossrail Station designs.
OTHER
4%
NORTHLAND
11%
BOP
IMPORTANT DISCLOSURES:
This document is published solely for informational purposes. It has been prepared without taking and may differ or be contrary to the opinions, conclusions or recommendations expressed
account of your objectives, financial situation, or needs. Before acting on the information in this elsewhere by ASB Bank Limited. We are under no obligation to, and do not, update or keep current
document, you should consider the appropriateness and suitability of the information, having the information contained in this document. Neither ASB nor any person involved in the
regard to your objectives, financial situation and needs, and, if necessary seek appropriate preparation of this document accepts any liability for any loss or damage arising out of the use of all
professional or financial advice. or any part of this document.
We believe that the information in this document is correct and any opinions, conclusions or Any valuations, projections and forecasts contained in this document are based on a number of
recommendations are reasonably held or made, based on the information available at the time of assumptions and estimates and are subject to contingencies and uncertainties. Different
its compilation, but no representation or warranty, either expressed or implied, is made or provided assumptions and estimates could result in materially different results. ASB does not represent or
as to accuracy, reliability or completeness of any statement made in this document. Any opinions, warrant that any of these valuations, projections or forecasts, or any of the underlying assumptions 14% 55%
conclusions or recommendations set forth in this document are subject to change without notice or estimates, will be met. WAIKATO AUCKLAND
Direct
Property
Fund
$10,000
MINIMUM INVESTMENT
A premium investment opportunity.
Oyster’s Direct Property Fund aims to provide investors with a stable monthly
income stream, combined with the potential for capital growth, through investing
in a diversified portfolio of quality property assets. This PIE fund targets a portfolio AA Rating by FundSource
weighted towards major urban locations, quality tenants and long leases.
Diversified commercial property Weighted Average Lease
exposure at over $550 million Term of 7.03 years
Office, industrial & retail assets,
510 Existing Investors
in a single investment
Distributions paid monthly 99% Occupancy
Diversified income stream
Independent AA Rating by FundSource
from 83 tenants
All figures are as at 31 March 2019.
contact us as soon as possible to register your interest, rich lyons capital sourcing manager
and for a copy of the Product Disclosure Statement. 021 841 960
Oyster Management Limited is the manager and the rich.lyons@oystergroup.co.nz
issuer of units in the Oyster Direct Property Fund.
Prospective Investors are recommended to seek professional advice from an Authorised Financial Adviser which considers
their personal circumstances before making an investment decision. This offer is made in accordance with the Financial Markets
Conduct Act 2013.
oystergroup.co.nz
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