Oyster Purchases Iconic Ponsonby Cider Building
An Auckland landmark property has been acquired by leading New Zealand commercial property company, Oyster Group.
Oyster has unconditionally contracted to purchase the prominent Cider building on the corner of Williamson Avenue and
Pollen Street in the central Auckland suburb of Ponsonby.
The high profile property is due for completion in the next couple of months and is a 13,200m² mixed use retail and
office development. Oyster is purchasing the property at a yield of 6.74%, equating to a purchase price of approximately
$93million, and settlement is due in June this year.
The property is being developed by Progressive Enterprises and will encompass a new 4,000m² Countdown Supermarket on a
20-year Lease, 8,000m² of office across three floors, 11 specialty retail tenancies over 900m2 along Williamson Ave and
Pollen Street and around 520 onsite basement carparks. Cider will be 100% leased to General Distributors Limited
(Countdown), Fairfax NZ Limited (on a 12 year lease) and convenience retail.
This site is unique as one of Auckland’s first real mixed use developments. The neighbouring Vinegar Lane (a tribute to
the old DYC vinegar factory which once stood on the site), will not be owned by Oyster but is part of the greater
development accommodating a range of occupiers including architects, designers and engineers. It houses high quality
apartments on the top floor.
Adrian Walker, Progressive Enterprises’ General Manager of Property, said the sale of the distinctive mixed use site is
a great result for the business.
“From the outset, we knew this development would be an attractive offering for buyers given its great location and
potential for future growth.
“We are not long-term property holders and would prefer to lease sites we have developed for our own supermarket use.
The sale and lease of this property will allow us to generate capital which we can then reinvest in growing our
business.”
Jonathan Ogg, Senior Director of Capital Markets at CBRE who brokered the Cider sale, says the sale of Cider is the
largest, city fringe transaction for many years in an area which is demonstrating exceptional growth.
“The Ponsonby market is extremely buoyant at present, with demand for all property types coming from a range of sources.
“The number of apartments in Ponsonby and its neighbouring suburbs is currently over 1200 and over the next few years
the supply pipeline indicates this will increase by a further 25%. This growth underpins the relevance of Cider as a
trophy asset with strong yield potential, as well as the retail and office markets going forward.”
Mark Schiele, Oyster’s chief executive officer, says the purchase is significant for the company and the multi investor
ownership structure will ultimately be the largest which Oyster has created. A total of 50 interests of $1,000,000 each
will be made available to wholesale investors only, with a projected pre-tax return of 7.5% per annum. An Information
Memorandum will be available to interested investors from April, with shares offered for sale in conjunction with
Colliers International.
“Cider is an outstanding mixed use development which has been extremely well executed by Progressive Enterprises in
terms of its design fit in the Ponsonby area. As a ground-breaking development project in Auckland, it made good
commercial sense for Oyster to acquire the property and to create an investment structure for it.”
Schiele says property ownership structured for wholesale investors continues to be an important part of Oyster’s NZ$800
million property and funds management business, alongside public syndication offers, the company’s recently announced
Oyster Direct Property Fund, and management mandates from institutional and private property owners. The Fund will offer
investors diversified exposure to $240 million in quality New Zealand commercial property across the retail, office and
industrial property sectors, for a minimum investment of $10,000.
Oyster was also recently notified that it is one of the first in the commercial property industry to be granted a
Managed Investment Scheme (MIS) licence by the Financial Markets Authority.
Schiele says the requirement for all managers of investment products to be licensed will lift industry standards and
improve confidence in markets and outcomes for consumers and investors alike.
“This is a major step up in the regulation of the financial markets. The hurdle to licencing is set high and will weed
out those operators who don’t have the skills, staff and robust processes required to be a licenced manager. Ultimately,
this can only increase the quality of the managers which remain.”
ENDS