Plumbing World, 101 Mclaughlins Road, Wiri, Auckland. One of the properties in the Oyster Industrial portfolio.
Even in times of economic volatility, certain asset classes can remain resilient. As share prices slump, the industrial property sector has continued to deliver consistent performance for investors, producing the best returns in the New Zealand property sector for the past 15 years.
James Molloy, general manager of investment at New Zealand commercial property and fund manager Oyster Property Group, talks through the industrial property sector and how it remained a promising asset class for Kiwi investors.
Oyster’s PIE fund, Oyster Industrial, which invests in industrial real estate, has delivered exceptional returns to current investors, providing an annualized return of 11.1 per cent since its inception through to December 31, 2021.
There are so many investment options out there. Why choose industrial real estate?
Industrial real estate has been a consistent performer in the New Zealand property market for 15 years. And there’s a clear path to continued growth.
Underpinning its success is continued low vacancies, steady rental growth and the limited supply of appropriately zoned land available for developments.
These fundamentals, combined with stable monthly returns, the potential for capital gains and Oyster’s ability to select well-located industrial properties with high quality, long term tenants to create a diversified income stream is what makes industrial real estate a compelling opportunity for investors.
How has current market volatility affected your investments?
Rising interest rates are a key focus, and we are looking at how to manage that, whether that’s restructuring some of our debt, paying it down or taking advantage of acquiring strong yielding properties in the future.
What fundamentals should I look for when I invest in industrial real estate?
Like any investment, it’s important to understand your risk profile, and then consider the kind of returns you want. For example, Oyster Industrial offers stable monthly cash returns. You also need to consider the quality of the investment and the assets behind it. What’s in the fund? Is it well diversified?
How does Oyster help its clients make the most of investment opportunities in the sector?
We’re different from many investment firms as we’re a fully integrated manager, which means we provide a one-stop-shop for managing the entire lifecycle of commercial property.
We have our own in-house property management team, facilities management, and asset management. Unlike some other investment providers, we do not outsource those functions.
We’ve been doing this for more than 20 years and have built a solid track record for performance, execution, and delivery.We live and breathe commercial property. We continuously assess the market, our assets and what our investors are interested in and will derive value from.
We want as many Kiwis as possible to share in the benefits of commercial property so we work hard to make the path to investing simple.
What does the future of industrial property investment look like?
Looking into the longer-term future, I think we could start to see multi-storied industrial warehouses in New Zealand, following similar trends in Asia and globally. Particularly in land constrained environments such as Auckland.
Also, amid the rapid growth of e-commerce, last-mile logistics will become more important. Industrial locations will be needed closer to urban centers to help parcel carriers deliver products to consumers and complete the “last mile” of a delivery journey.
Learn more about Oyster’s current offers, including Oyster Industrial, which is currently reopened for investment, at oystergroup.co.nz/invest
Oyster Industrial Limited is the issuer of the shares.