An Auckland landmark property has been acquired by 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 13,200 square metre 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 4,000sqm Countdown Supermarket on a 20-year Lease, 8,000sqm of office across three floors, plus 11 specialty retail tenancies 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.
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,” says Schiele.