PMG to raise $ 44m for CBD investments

Property Managers Group has announced offers to raise a total of $ 44 million, across investment portfolios that it will manage, including the established Pacific Property Fund Ltd and a dedicated office managed investment scheme, PMG Direct Office Fund.

The combined raise is the largest offer Property Managers Group has presented to the market in its 24- year history; it offers investors the ability to gain access to diversified portfolios across numerous buildings and tenants at relatively low entry points.

The new PMG Direct Office Fund offer is for up to 29 million ordinary units to be issued at $ 1 per unit.

Property Managers Group CEO, Scott McKenzie, says that PMG Direct Office Fund is the first of a number of new funds Property Managers Group will bring to market.

“Over the past few years the office market, particularly in Auckland, has been performing well with low vacancies and increasing rental returns,” says McKenzie.

“Our investors have told us they want greater diversification and more sustainable returns. This is achieved by placing multiple properties, rather than one, into a managed investment scheme which provides greater exposure to more buildings and tenants.

“This is part of our strategic plan to shift away from the traditional single building ownership structures where investor returns are more reliant on the performance and retention of individual buildings and tenants,” he says.

PMG Direct Office Fund brings together solidly- performing, singleproperty investments currently managed by Property Managers Group and creates a portfolio of similar office buildings predominantly in Auckland and Tauranga.

Eight properties will initially go into PMG Direct Office Fund, offering diversification both geographically and across 50 tenants.

PMG Direct Office Fund i s targeting a gross distribution return of 7.50 per cent per annum for the first full year to 31 March 2018.

PMG expects the fund will attract investors who want sustainable returns and exposure to good quality assets in the office market.

“PMG Direct Office Fund and Pacific Property offer investors direct commercial property ownership without the challenges of day to day management,” says McKenzie.

Sixteen million new shares in Pacific Property Fund Limited, the largest investment portfolio Property Managers Group manages, are also being offered to the market.

Funds raised will go towards the purchase of a logistics industrial hub in Taupo ( Stag Park), a large retail property in a northern regional city CBD, and a mixed- use commercial and retail property in the Tauranga CBD.

Pacific Property director, Denis McMahon says the assets Pacific Property intends to acquire offer investors geographical and category diversity, with Stag Park representing a significant redevelopment opportunity.

“Since its establishment in 2014, Pacific Property has had a clearly defined strategy of investing in industrial, retail and commercial properties predominantly within the ‘ Golden Triangle’ of Auckland, Hamilton and Tauranga,” says McMahon.

“We’re thrilled to be bringing three new properties into Pacific Property, targeting a strong and sustainable gross dividend return of 7.20 per cent per annum for the full financial year to March 31, 2018, and delivering greater liquidity.”

Scott McKenzie