Oyster achieves AA rating’s first
Oyster Group’s Direct Property Fund is the first unlisted direct property fund in New Zealand to be given the AA credit rating by FundSource, and NZX-owned researcher.
The Oyster Group fund partially owns a portfolio of properties worth $447.7 million and manages about $1.2 billion in property as of October 2017.
The credit rating puts the Oyster Direct Property Fund in the top 5 per cent of the 64 funds rated by FundSource. The fund includes retail, industrial and office buildings, with the the $210m Millennium Business Centre in Auckland its most expensive asset.
FundSource said: ‘‘the fund is likely to increase its exposure to the Millennium Centre’’. As of October 2017, the fund owned a 6.1 per cent share of the centre.
Oyster chief executive Mark Schiele said the company was pleased with the rating, especially since the fund was only launched in mid-2016.
‘‘We view this as solid independent confirmation of the [fund’s] structure and performance.‘‘
Schiele said the fund has a value of about $40m and has more than doubled in size in the past 18 months.
The fund had a total value of $27.7m in property assets last October.
‘‘The DPF provides investors with diversified exposure to approximately $500m in quality commercial property throughout New Zealand, monthly cash distributions or the ability to reinvest and the potential for capital growth,’’ Schiele said.
Auckland properties comprised 80 per cent of the fund’s assets.
Schiele said the fund’s strategy was to invest in a range of commercial properties that fit its criteria, which covered the main centres, long-lease terms and quality leases.
‘‘Our intention is to continue to progressively grow the fund providing investors with ongoing opportunities to invest.’’
‘‘We want participation in commercial property ownership to be achievable for as many people as possible and we expect the Oyster Direct Property Fund to continue to have wide appeal.’’
Schiele said the FundSource rating provided a great start to 2018, following on from the $112m capital raising last year for the Millennium Centre, which was the largest ever single property equity raise in New Zealand.
Oyster Group is 50 per cent owned by Cromwell Property Group, an Australian real estate investment trust listed on the ASX.