Purchased in 2006, 246 Queen Street benefited from the vibrant energy of Auckland city for several years, before a surge in development saw new precincts emerge and the popularity of some areas shift.

Oyster’s exceptional market expertise and sharp market insight shone through their well-executed leasing strategy and timely exit, resulting in an outstanding total return for investors.

Investment highlights

When Oyster purchased 246 Queen Street for $24,987,950 in 2006, its central location and strong tenant profile made it a compelling investment opportunity with significant potential.

Predominantly anchored by a diverse mix of international education-based tenants andwell-known retail lessees, the property’s versatile layout combined with its prime location in Auckland’s CBD main retail thoroughfare, made it a highly sought after property among tenants.

246 Queen Street was managed by Oyster for a total of nine years, during which time the CBD underwent significant changes. These were mostly driven by the 2012 City Centre Masterplan which proposed a package of projects to revitalise parts of the city with a focus on the waterfront.

Newly built precincts offering mixed-use developments sprung up in places such as Wynyard Quarter and Commercial Bay and were a drawcard for some office tenants looking to swap out their city location for the sea.

Looking at the positives, Oyster’s General Manager – Investment, Steven Harris said “the significant foot traffic generated by 246 Queen Street’s educational tenants was central to its success for investors.”

However, the time remaining on some of the property’s then-leases were short, prompting Oyster to recognise the need for substantial capital expenditure to upgrade the asset ready for re-leasing.

Ultimately, Oyster decided to divest the property for $34,700,000 in 2015, representing a 33.5 per cent premium to its 2013 book value of $26,000,000.

Across the nine-year lifecycle of the property, investors received annual income returns and annual total returns of 7.7 per cent and 13.9 per cent respectively and a total return of 131.4 per cent.