Insights & Resources
Stay up to speed with the latest insights from Oyster and resources that are invaluable as an investor.
Insights & Resources
Our expert property management team manages all Oyster properties in-house on behalf of investors, creating exciting leasing opportunities for commercial tenants looking for high quality premises.
Advisors
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Oyster is a leading New Zealand commercial property and fund manager with expertise in property fund structuring and equity raising. Oyster currently manages over 20 property funds structured for retail and wholesale investors, including Oyster Industrial, Oyster Large Format Retail Fund and the diversified Oyster Direct Property Fund.
The company partners with institutional Institutional and private equity investing in commercial property and holds management mandates with third party property owners across development, asset management, property and facilities management, and retail leasing.
Oyster manages a range of retail, office and industrial assets throughout New Zealand, with a combined value in excess of NZ$1.8 billion. The team comprises specialists in transactions, asset and property management, development and finance.
Oyster Property Group is 50% owned by ASX listed Cromwell Property Group.
The AML/CFT Act (Anti-Money Laundering and Countering Financing of Terrorism Act 2009) requires financial institutions to put preventive measures in place to help tackle money laundering. Like many institutions, Oyster is required to verify the identity of all individuals and entities investing with Oyster, a key requirement is to identify and verify investors’ effective control and beneficial ownership arrangements.
Oyster partners with First AML, a specialist service provider that has been engaged to conduct Customer Due Diligence (CDD) on Oyster’s behalf. First AML will contact Oyster investors directly to collect information and complete the CDD process.
Oyster believes active asset management is the best way to protect the value of, and maximise returns from, your property investments. Our specialist team of property, facility and asset managers are in constant communication with our occupiers to understand their needs and challenges. We work to develop solutions and options for them that support both the tenant and your investment.
Delivering value-enhancing initiatives is also a top priority for our team. Our active approach means we always look for opportunities to increase rental growth, improve and extend lease terms, and explore new revenue opportunities on behalf of our investors.
We ensure our properties remain relevant in the market by improving amenities and through sustainability initiatives. These elements are becoming increasingly critical to meet our occupiers’ needs and expectations. Keeping abreast of trends in this space helps us ensure consistent occupier demand.
Our team place emphasis on securing new tenants with strong financial backing, appropriate lease security and a successful trading history.
The final aspect of our approach is real-time monitoring of political, social and economic environments and how they impact the property industry. This ensures we remain agile and able to change quickly to benefit our properties, occupiers and investors.
Investors should consider the key risks to investing in an unlisted property fund. For each investment Oyster outlines the key risks to an investment in a Product Disclosure Statement or Information Memorandum depending on the type of offer.
Liquidity Risks
Oyster has an established investor and prospective investor base however there may be circumstances where market conditions or the fund’s performance impacts the ability to sell your interest(s). On this basis, Oyster cannot guarantee that there will be a willing buyer for your interest(s) or a willing buyer at an acceptable price for your interest(s).
If a property were to be sold, the property market conditions at the time would largely dictate the price that could be achieved and how long it would take to sell the property.
Bank Loan Risk
The interest payable on the bank loan is usually the largest expense for a property owner. Changes in interest rates can have a material impact on the distribution from the scheme. Interest rate risk can be managed by fixing the interest rate for a period on all or part of a loan. Oyster regularly reviews the bank loans and assesses whether fixing interest rates are of benefit. Fixing interest rates rather than using a floating rate provides certainty of the interest expense over the period that the rate is fixed.
Property Related Risk
Oyster invests in physical assets which can require substantial repairs and maintenance, or can be destroyed by fire or earthquake and the income from the property or properties is often reliant on a few major tenants paying rent. Unforeseen maintenance, structural repairs or works of a Institutional nature, which the landlord is responsible for, could be difficult to fund from working Institutional ; if this occurs, bank borrowings and/or a reduction in distributions might be required.
Oyster carries out detailed annual budgeting each year to minimise unforeseen expenditure and regularly reviews the lifecycle of a building’s plant and machinery, such as lifts and air-conditioning. Each scheme has insurance in place to provide cover for material damage and loss of rents.
Tenant Default
A principal risk of commercial property investment is that a tenant will be unable to, or may chose not to, pay rent and outgoings under their lease which would ultimately reduce the income return on the investment. Reduced rental can be significant as this will reduce cash distributions to investors and may impact the value of the property investment too.
Oyster undertakes credit checks on new tenants and obtains personal guarantees or bank guarantees from tenants (where possible).
Generally, our investors have a long-term investment outlook and therefore investments with Oyster are for an indefinite period. Depending on the structure of the investment, investors may be able to exit their investment through Oyster’s secondary market facility.
At the time of a re-sale enquiry, Oyster will provide an investor a summary of the fund’s performance and comparable re-sale evidence (if applicable) to assist the investor in establishing their asking price. Investors are responsible for setting the asking price and their preferred settlement date, prior to Oyster marketing the investment for re-sale.
Once an asking price and settlement timeframe is agreed with the existing investor, they can consider the following options to sell their investment:
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market to select Oyster investors or prospective investors (without formal advertising) who have previously expressed their interest to invest in the fund;
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market to all existing Oyster investors within the fund; and/or
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market to all existing Oyster investors outside of the scheme and all prospective investors who subscribe to Oyster’s new offers and re-sales.
Oyster always take instruction from the seller to choose their preferred method(s) of sale. The past re-sales, the latest quarterly investor update, annual report and audited financial statements are made available to all prospective investors. A copy of the governing deed and latest valuation is also available on request. Oyster prepares all the sale documentation which consists of a sale & purchase agreement for the interest(s) and a deed of accession which binds the new investor to the terms of the existing scheme. The fully executed documents are then returned to Oyster and the purchaser deposits their funds to Oyster to be passed onto the vendor on settlement date. Generally, investors prefer to settle at the end of the month to avoid apportioning monthly distributions, however if both parties agree a specified settlement date, Oyster can accommodate this within the sale & purchase agreement documentation.
Oyster may charge an administration fee, of up to 2% plus GST of the transaction value, for arranging the successful transfer. This fee is always payable by the seller.
Oyster provide liquidity to investors whatever their reason for wanting to part ways with their investment. Due to our extensive investor database and investor relationships, on average our re-sales have since 2018 have gained commitment from investors in three working days or less following the initial marketing.
In instances where building(s) are sold and a scheme is wound up, all investors are paid out their proportionate share of the scheme’s equity after all costs, including any Institutional gain.
For Oyster’s Direct Property Fund, the fund accepts monthly redemption requests payable in the following month, subject to the fund’s monthly available funds. Oyster does not charge any fees for redemptions.
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Oyster has a range of unlisted property funds. Our multi-asset funds include the Oyster Direct Property Fund, Oyster Industrial LtdLtdLimited and the Oyster Large Format Retail Fund, these funds are PIE structured and provide the potential for tax advantages due to the highest prescribed investor rate of 28%. Returns are paid monthly less the nominated PIR (prescribed investor rate) provided by the investor and investors receive monthly returns after tax. An Annual Tax Certificate is provided to all investors after each financial year ending 31 March.
Oyster also structures proportionate ownership schemes, these are typically for single assets only. Returns are still paid monthly, however Oyster pays the gross return to investors and provides investors with the audited financial statements after each financial year ending 31 March. These financial statements provide a schedule of taxable income for the scheme and on a per interest basis. Investors generally provide this to their accountant or tax agent to complete their tax return.
Oyster can explain the information contained in the Product Disclosure Statement or Information Memorandum for the scheme however the decision to invest ultimately sits with the investor.
Oyster does not provide financial advice or recommendations; prospective investors are recommended to seek professional advice from a financial advice provider which considers their personal circumstances before making an investment decision.
