From acquisition to exit: the journey of a long-term investment in an unlisted commercial property fund.

Investing in commercial property is a long-term play with the potential to generate a steady monthly income and achieve long-term capital growth. Like any investment class, there will be ups and downs – but what matters most in commercial property is the
time horizon.

To realise optimal returns, investors generally hold these investments for an extended period, riding through market cycles and asset-level changes.

This is the story of one investor, one building, and an 18-year journey inside a commercial property fund. It spans market highs, global recessions, and a global pandemic – and shows why taking a long-term view can make all the difference.

The returns journey at a glance

Over the 18 years this investor was in Oyster Property Group’s 60 Khyber Fund, the asset weathered the global financial crisis (GFC), a major tenant exit, three major refurbishments, and COVID-19 disruption.

Despite this turbulence, they received consistent monthly income, exposure to long-term growth through reinvestment and benefited from stability through market cycles.

The result for that investor

• Annual income returns averaging 8.4 per cent per annum since inception.
• Annualised total return of 12.1 per cent for investors.
• Sold February 2023 for $21 million, double the original purchase price.

Year one: a clear business strategy. In June 2005, Oyster acquired 60 Khyber Pass Rd in Auckland for $10.2 million. The asset was opened to investors in $100,000 parcels.

The strategy was clear from day one: maximise income, invest for future resilience, and grow value through tenant strength and smart capital expenditure.

2009 to 2010: income reduced, asset upgraded. In the wake of the GFC, the anchor tenant exited. Rather than rushing to refill the space, Oyster reduced distributions and undertook a strategic refurbishment to reposition the asset. The short-term impact: lower income. The long-term benefit: stronger tenant appeal and improved lease terms.

2013 to 2019: income strengthened, market strong. As occupancy stabilised and interest rates declined, the building entered a period of strong performance. For the investor, this marked a return to higher distributions – supported by a new well-known global brand as a tenant with a healthy six-year lease, alongside other well-capitalised occupiers.

2019: adapting to a changing market. With new tenant needs emerging and parts of the building ageing, Oyster reduced distributions again to initiate a second major refurbishment. This investment was strategic – anticipating evolving tenant expectations in the office market and positioning the asset to secure quality tenant covenants and extend the value life cycle of the building.

2020: Covid-19 disruption. The pandemic created temporary disruption across the property sector. Rather than increase income as interest rates decreased, Oyster kept distributions at a lower rate to prioritise tenant stability and secure a new anchor lease. As a result, the capital value was preserved – and the fund maintained a clear path to recovery.

2021 to 2023: re-leased, stabilised, and sold. With the property repositioned and stabilised, the decision was made to divest. The timing reflected a deliberate strategy – crystallising gains following post-Covid stabilisation while tenant strength and occupancy were at target levels.

In early 2023, the property was sold for $21 million – more than double its original purchase price.

Long-term investing, in practice

This isn’t just the story of one property. It’s an example of how commercial property works when it’s done well – and why investors need to think in decades, not quarters. What it shows:

• income stability, even when markets turn
• inflation resilience, through rental escalations and long-term leases
• capital growth, driven by hands-on management and reinvestment
• the compounding effect – returns build slowly, then significantly.

“From the outset, our strategy was clear – invest in a quality asset in a strong location, secure reputable tenants on long-term leases, and actively manage the property to maximise value,” says Mark Schiele, CEO of Oyster Property Group.

“By prioritising strong tenant covenants, investing in targeted refurbishments, and adapting to the changing needs of the office market, we were able to navigate some significant bumps in the road and deliver strong returns to our investors over the course of the property’s life cycle with us.”

To learn more, visit oystergroup.co.nz or contact the Oyster Investor Relations team on +64 9 281 4460

Market snapshot – five signals to watch

As we head into 2026, the market remains in recovery – but the shift is becoming visible. Not in dramatic leaps, but in steady steps that show confidence is rebuilding and capital is moving again.

1. Capital returning to secondary markets
We’re seeing more buyers entering the secondary market for unlisted fund units – a space where existing investors can trade their holdings peer-to-peer. Strengthening distributions and a stabilising interest-rate environment are supporting demand. As term-deposit rates fall, capital is actively looking for new opportunities.

For Oyster, the second half of 2025 delivered some of the highest resale volumes in some time – signalling a renewed interest in income-focused commercial property.

2. Christchurch leading the pack
Christchurch continues to outperform, with some of the lowest commercial vacancy rates in the country. Strong leasing fundamentals and a growing economic base are drawing capital south.

Oyster’s three Christchurch assets – two industrial and one office – alongside Dress Smart Hornby, which we manage, have continued to perform steadily despite wider economic volatility. Christchurch presents a compelling regional diversification case for commercial portfolios, and we continue to keep an eye on potential strategic acquisition in the region.

3. Large format retail resilient, investor demand increasing
Retail has been tested – however strong investor demand for large-format retail signals ongoing confidence in the asset class.

Across our own portfolio, large format retail has remained resilient. Our supermarket assets, hardware assets and destination discount outlets like Dress Smart Auckland and Christchurch – which we manage – continue to hold their value. Diversification of occupiers remains key to Oyster’s approach to driving sustained performance.

4. Industrial strength endures
Industrial remains the highest-performing commercial property asset class nationally, underpinned by persistent tenant demand and structurally low vacancy. Rental growth is holding, and sustainability performance is now a decisive factor in major leasing commitments.

We’re leaning into that momentum – continually enhancing operational performance and elevating ESG credentials across our industrial assets. We’re seeing increased tenant appetite for longer-term leases as conditions improve and as always, we continue to explore opportunities for selective portfolio expansion where rental and occupancy strength are proven.

5. Office is re-shaping, not retreating
Premium office assets with strong amenities, transport access and sustainability credentials continue to benefit from the flight to quality. Office remains relevant – it’s just evolving.

Across our own portfolio, flexibility is playing out differently for every tenant. Some are consolidating, others are right-sizing or relocating to be closer to staff and customers. These moves aren’t about growth or contraction in isolation – they’re about aligning space with how work happens now.

Looking forward
This phase of the cycle presents attractive entry points. Conditions are improving, quality assets are currently sensibly priced, and momentum is returning beneath the surface. Those who move early – with conviction, discipline and a long-term view – will be best placed to benefit as the market continues to turn.