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Jasper’s investment platform went live in November 2019, and it was vital to launch the service with a property that had all the hallmarks of a strong investment opportunity for investors. After significant due diligence and extensive negotiations, the purchase of Holmes Road Industrial was agreed.
Holmes Road Industrial displayed strong property fundamentals that made it an attractive first offering. It is 100% occupied, extensively refurbished both internally and externally and was secured outside of a marketed process. The property benefits from a strong stable cash flow and fixed rent growth built into the leases, which will continue to generate a healthy annual return for Jasper’s investors. The total equity in Holmes Road Industrial was subscribed in under 48 hours which demonstrates an appetite for both attractive yielding assets with strong fundamentals and for a more accessible way to invest.
The industrial asset class is considered to be one of the three major pillars of commercial real estate, along with office and retail, and is currently performing the strongest. The availability of industrial space continues to shrink while occupier demand is at record levels. The Auckland Industrial sector continues to outperform other asset classes, with the momentum for the next 12 months expected to continue unabated. Increasing land values, construction cost inflation and constraints on commercial lending have limited further supply to an already tightly held market.
In addition, a proliferation of E-commerce, internet technology companies, and manufacturing means that demand for industrial investments has surged over the past few years. Colliers Research highlights that “the ‘Golden Triangle’ between Auckland, Hamilton and Tauranga will continue to rise as a popular occupier, owner-occupier and investor destination. The interconnection of population, ports, and infrastructure is a strong driver for the [industrial] sector”.
Supply continues to be constrained, resulting in a compression of yields. This, combined with upward pressure on rents, has seen the total return on industrial properties remain at double-digit levels. Vacancy rates across Auckland’s leading industrial precincts have also fallen to historically low levels as demand for space has outpaced any new development.
Holmes Road Industrial is zoned as Light Industry under the Auckland Unitary Plan. There is an opportunity in the future to achieve residential rezoning to mixed housing suburban or urban zones. A repositioning of the site would potentially present a significant upside to investors above the base case.
The Auckland Industrial market is tightly held. Strong fundamentals have been compressing yields to record lows (a key driver of capital growth over that last decade). Holmes Road Industrial presented a unique opportunity for investors to purchase stable cash flows at an attractive yield with the opportunity for further yield compression in the future.
The target average cash dividend of 7% over the hold period was a key driver for investor demand. A sought after asset class supports ongoing capital growth and the opportunity targeted a total return of approximately 11% per annum over the first 5 years.
A cornerstone feature of this asset was secure rental growth. Fixed annual rent increases for each tenancy will underpin the capital values and ensure rents keep pace with the market. This inevitably leads to robust long term returns.
Holmes Road Industrial was Jasper’s first investment offer. Since closing the first offer, the investment team has been diligently working to bring additional offers to investors. The team is currently looking at securing off-market properties in both the office and industrial sectors. The properties will vary in their risk/return profiles and investment strategies. The team has been carefully analysing a number of opportunities and aims to offer only the highest quality investments. Jasper’s next offer is expected to go live by the end of Q1 2020.
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Mark Campbell
CEO & Executive Director
Posted on 3 Feb 2020
Our expertise in acquiring and managing real estate assets, combined with our proprietary technology, helps us generate strong risk-adjusted returns for a diverse range of investors.
Jasper is an experienced operating partner for family office and institutional investors wanting access to high-conviction real estate strategies across Australia and New Zealand. We co-invest alongside our partners in each joint venture.
We are proud of our track record and relationships with some of the biggest names in real estate, including Blackstone.
We provide private investors with curated opportunities, low minimums, transparent reporting and improved liquidity. All available through our secure online portal.
We manage the entire investment process for you from start to finish; you sit back and enjoy direct commercial property ownership and the passive income it can provide.
Read Important Disclosures
Important Disclosures
Liquidity Not Guaranteed: Jasper offers secondary market functionality on its platform from time to time, however, there is no guarantee that you will be able to exit your investments on the secondary market or at what price an exit (if any) will be achieved.
Performance Not Guaranteed: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this website will be profitable, or equal any corresponding indicated historical performance level(s).
Risk of Loss: Investing in commercial real estate involves a high degree of risk and may result in partial or total loss of your investment. We encourage our investors to invest carefully. We also encourage investors to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish.
No Personal Advice: Jasper does not provide personal advice or recommendations. The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. It is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice before making a decision.
Wholesale Offers: Jasper currently only offers financial products to wholesale (or other qualifying) investors. Jasper does not currently hold a Managed Investment Scheme (MIS) license and our products are not suitable for retail investors.
FSPR No. 692011. Information on this page is based on information available to us as of the date of posting and we do not represent that it is accurate, complete or up to date.