Christchurch two building syndication

5:00 AM Saturday October 22, 2016 True Commercial

The building at 32 Oxford Terrace occupies a prime position in Christchurch’s CBD.

Investors have the opportunity to register for an interest in two first-class commercial buildings with exceptional tenant covenants strategically located within the escalating Christchurch CBD.

One of the buildings is anchored by a 15-year-lease to the Canterbury District Health Board while the other is anchored by a New Zealand subsidiary of a top Fortune 500 company. Both properties combine for a weighted average lease (WALT) term of more than 10 years.

A total of 634 interests of $50,000 each are expected to be made available to investors for the A-grade buildings at 32 Oxford Terrace and 104 Victoria St in Christchurch Central, through Silverfin Capital Ltd in conjunction with Colliers International’s syndications division.

“A key point of difference for these properties is that 80 per cent of the total tenancies (by floor area) are to either government tenants or a Fortune 500 business. This presents investors with a significant degree of confidence and security,” says Colliers’ Syndication Investments Director, Charlie Oscroft.

CDHB is the primary tenant at the six level building at 32 Oxford Terrace. It is considered a “blue chip“ Government tenant. Its lease commenced in November 2015 with an extensive fit-out completed in July this year when 300 staff moved on site. CDHB’s 15-year lease also includes one 10-year right of renewal period.

The property at 104 Victoria St has four of its five levels leased to Telogis Limited — a global GPS company with its research and development headquarters in Christchurch employing 150 staff. Telogis is owned by Verizon, a US based multinational business, ranked 13th on the Fortune 500.

The remaining tenancies at 104 Victoria St include New Zealand restaurateur Tony Astle’s Chinwag Eathai as well as a boutique private gym, Prime Health and Fitness.

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The building at 104 Victoria St has undergone major refurbishment and strengthening work

Oscroft says this wide ranging, solid tenant mix provides a diversified income across both properties, further strengthened by the tenant covenant, strong WALT and both buildings being seismically upgraded to more than 100 per cent of the new building standard code.

“All of these factors, along with the Oxford Victoria Scheme’s forecast pre-tax cash return of 8 per cent per annum paid monthly (forecast to March 31, 2018), makes it a very attractive candidate for a property syndicate.”

Cheryl Macaulay, managing director of Silverfin Capital, believes the buildings represent excellent investment stock. “Both these assets are well located, with great tenants, good lease tenures, and excellent seismic strength. They are the type of solid investment assets that Silverfin is happy to put its name to and add to our growing portfolio around the country.”

Silverfin is licensed under the Financial Markets Conduct Act 2013 to manage ‘managed investment schemes’ (excluding managed funds) that invest in real property or property syndicates/real property proportionate ownership schemes. The company has recently offered significant proportionate ownership schemes investing in commercial buildings in both Hamilton and Auckland.

Gareth Fraser, Colliers’ investment sales director, says the syndication space in New Zealand is experiencing high demand for quality investment products and this latest scheme from Silverfin Capital should appeal to a wide range of investors.

“Proportionate ownership is a great way for individual investors, who might have previously only owned residential property investments, to look at diversifying into commercial property and accessing the superior returns that are often available on commercial assets.”

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The Oxford Terrace building is the first building in the newly designated Health Precinct.

Location

The building at 32 Oxford Terrace occupies a prime position in Christchurch’s CBD, fronting the Avon River within the city’s Health Precinct. It is the first building in the newly designated Health Precinct, which will include the University of Otago’s Medical School, and training and research facilities for Christchurch Hospital. The core of the precinct is the hospital, which is undergoing substantial redevelopment and acts as a hub for other care and research facilities.

The property is close to the new, revitalised retail precinct and is close to Hagley Park and the site for the Metropolitan Sports facility. It also benefits from a second frontage to Tuam St.

The building at 104 Victoria St has an excellent location, fronting Victoria St within one of the city’s popular office and hospitality precincts, which hosts a number of superior A-grade office developments. The property is on the “northern gateway” fringe of the CBD and has a second road frontage to its rear. This location is the attraction for iSite Limited’s tenancy relating to prominent electronic and standard billboards on two sides of the building.

Properties

Originally constructed in the late 1980s, 32 Oxford Terrace is a six-level building, which was damaged in the 2010/2011 seismic events. The property was subsequently stripped back and underwent substantial foundation work, together with additions and re-cladding to now comprise a substantial high quality A-grade building. Additional structural steel and BRB braces and further floor area were added to all four elevations. The envelope is a mix of precast concrete, ACP, aluminium joinery and curtain wall.

The building also now provides the latest in sustainable technology including sensor-controlled LED lighting and high-performance glazing.

At 104 Victoria St major refurbishment and strengthening work has been undertaken to achieve its 100 per cent of new building standard in 2014, again after being damaged in the 2010/2011 seismic events. It was stripped back to the frame, had the floor plates extended, an exterior re-clad with structural engineering and also has a new glass facade. It has seismically designed foundations with new reinforced concrete floor, original reinforced and concrete block infill with concrete columns and new feature steel frame reinforcing. The roof is galvanised iron roofing with parapet walls.

Offer

Silverfin Capital Limited intends to make a retail offer of interests in the Oxford Victoria Scheme. No money is being sought and interests cannot currently be applied for under the intended offer. If the offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013. Silverfin is seeking preliminary indications of interest for the offer which can be made by contacting Colliers International. No indication of interest will involve an obligation or commitment to acquire interests.