Office syndication with govt tenants
A modern office park with two government anchor tenants, in Hamilton’s Te Rapa commercial precinct, is on offer through a new proportionate ownership scheme.
Oyster is offering investors a chance to acquire an interest in the $69.5m Home Straight Park complex for as little as $50,000.
Investors in the scheme are forecast to receive annual pre-tax returns of 6 per cent, paid monthly, projected to March 31, 2022.
Located at the heart of Hamilton’s growing commercial and industrial precinct, Home Straight Park is a 2.9ha office estate situated at 17, 19 and 21 Home Straight, Te Rapa.
It comprises three modern office buildings, developed between 2012 and 2018, with a combined net lettable area of 14,738sq m.
The offering is anchored by Fonterra subsidiary RD1 Ltd, the Ministry of Education and another key government agency, which together provide 67 per cent of the property income.
A strong mix of office and retail tenants, including national brands City Fitness and Vivo Beauty, contribute to an expected weighted average lease term of 5.75 years.
Oyster has appointed Colliers International’s syndications team to market interest in the scheme.
Syndications director Charlie Oscroft says it is a chance to invest in a high-quality modern commercial office park in an exceptional location off Te Rapa Rd.
“Hamilton’s office market has enjoyed steady rental growth and firming yields in recent years, resulting in capital growth across all office types.
“With these conditions set to continue, Home Straight Park is well placed to provide very good property investment fundamentals capable of continuing to attract quality occupiers well into the future.
“The business park offers a broad mix of office and retail tenants, with the three largest occupying 67 per cent of the property.
“The investment scheme’s founder and manager, Oyster, is a well-established property and fund manager with an extensive track record in this field.
“The stability of this investment is enhanced by the quality covenants tenants — Fonterra subsidiary RD1, Ministry of Education and another key government tenant.”
Rich Lyons, capital sourcing manager at Oyster, says the property’s location in a rapidly developing area within Hamilton will appeal to a range of investors. “Hamilton, along with Auckland and Tauranga, forms New Zealand’s ‘Golden Triangle’, the fastest-growing area of New Zealand, with continued population and GDP growth, and strong transport connectivity.
“As Hamilton’s growth hub, Te Rapa is uniquely well placed, making Home Straight Park a superb longterm investment.”
The property’s three buildings were developed in two stages with the first being completed in 2012 (17 and 19 Home Straight) and the most recent in 2018 (21 Home Straight).
The combined leases provide an overall weighted average lease term of 5.75 years as at the expected settlement date. The tenants include RD1 and City Fitness at 17 Home Straight; the Ministry of Education at 19 Home
Straight; Vivo Beauty, Combined Technologies, Again Cambridge Sushi, Mindi Limited, Coffee Culture, Luther & Sons and a major government tenant at 21 Home Straight.
Chris Dibble, research and communications director at Colliers, says investor confidence has been on an upward trend in Hamilton over the past few years.
“This confidence has been supported by positive fundamentals including solid population and employment growth, infrastructure enhancements and increasing occupier demand.
“This looks set to continue with the latest confidence survey finding a net positive 44 per cent score for Hamilton over the next 12 months, well above the 10-year average of a net positive 21 per cent.”
Dibble says Hamilton is benefiting from its location and function as a major gateway for the central North Island and its important and strategic network connections with Auckland and Tauranga.
“Solid current and future growth have led to an increase in commitment from a wide range of private and public sector tenants looking to occupy office space across Hamilton.
“More recently, the rise in the number of new developments and rising absorption rates of existing space has helped to push vacancy rates down, especially for highquality space.”
Dibble adds yields will continue to compress due to these positive market factors, adding to the appeal of prime investments in popular Hamilton locations.