31 Aug 2026
This year, PMG's total funds portfolio value crept over $1B – a reflection of decades of smart buying, strategic enhancements, enduring tenant partnerships and capital growth.
As a property fund manager, the quality of our retail investment products is directly linked to the quality of commercial real estate we buy, develop and manage. The first visible step in this journey is obviously the acquisition, but there’s a significant amount of work that happens before this.
Daniel Lem has been integral to PMG’s acquisition strategy for over 10 years. While the key fundamentals of the numbers needing to stack up remains as important as ever, Dan says this strategy today features three core underlying philosophies.
A mind shift from property manager to fund manager
We don’t shy away from our syndication roots – it’s how our portfolio journey started 32 years ago with our very first property purchase. But as a property fund manager, we now approach acquisitions differently, with decisions based on the metrics of the fund rather than just the asset.
As long as a particular Fund is in a position to transact, we will look for opportunities to grow and strengthen it. Through this process we may find a property or indeed properties that work well as standalone investments. However, we need to look beyond this to focus on how any addition will influence the metrics (geographic, sector and tenant weighting) as well as financial performance of the Fund in line with its philosophy and intent. We also consider the Fund’s WALT and LVR settings, as well as its target rate of return.
Tenant and lease quality are paramount
Our retail Funds are fueled by income-producing assets. Therefore, while location remains a key consideration for acquisitions, even more important to us is the confidence we can have in their ongoing performance.
The basis for tenant performance is a strong lease agreement, as this can be the governing document for the next 10 or even 20 years. Key things we need to see are a rent review mechanism that enables growth; and the built-in security of either a bank guarantee (usually equal to 12 months’ gross rent) or an equivalent cash security held in a solicitors trust account. In the event the tenant breaches its lease, PMG may call the security. This will allow us time to re-lease the premises if the tenant goes out of business.
Beyond the lease agreement though, we need to first get to know the tenant – to understand their values and drivers and ensure we can foresee a positive long-term working relationship with them. We often talk of our tenancies being property partnerships – and this is integral to a sustainable investment product. Within this approach, we ensure that our tenants are not ‘over-rented’ – as a fair, stable tenancy translates to reliable returns for our investors.
Use our investment capability as a force for economic and social good
Whether it’s in high-quality office, industrial or Large Format Retail buildings, we’ve always been proud that our investments contribute to the wellbeing of ‘NZ Inc’, providing fit-for-purpose premises that enable forward-thinking businesses to thrive and ultimately grow our GDP.
A few years back, we added an extra layer to this by beginning to invest in Early Childhood Education (ECE) centres, aligning our investors’ objectives of growth and income with the ability to provide quality ECE options in areas that needed them most. And more recently, we’ve taken this social focus a step further by targeting investment opportunities that will also help to avert the growing health crisis that is happening across New Zealand.
The shortcomings of our health system continue to be exposed through hospitals that are old, dilapidated and at capacity, with the strain that’s been felt in the public sector now being passed through to the private sector. We believe strongly that just as quality real estate investment can support our economic wellbeing as a country, so too can it help create better social and health outcomes. This is why we are intending to fund the construction of a new private hospital in Tauranga which PMG will own and manage at its completion. In time, we may look to create a social infrastructure Fund with a broader mandate to acquire healthcare, education, aged care as well as ECE assets.
Because the development of property carries greater risks, it is not suited to our retail Funds. However, by engaging our wholesale investors first who have a different risk profile, we’re able to access and deliver development opportunities (usually through PMG Capital Fund) through to our retail Funds as completed assets. In this way we can deliver financial and social value to all our investors.
Across our entire portfolio, matching the right capital to the right opportunity at the right time is fundamental to a successful acquisition strategy. As we pass $1B in assets under management we are very proud of our ability to provide strong reliable returns to different types of investors through challenging economic conditions. We remain in a solid position to take continuing advantage of opportunities that are in line with Fund mandates.
Disclaimer: The information in this blog is general and current as of August 2026. It is not intended as regulated financial advice under the Financial Markets Conduct Act 2013 and does not consider your specific circumstances. PMG does not provide financial advice. Please consult a licensed financial advisor before making investment decisions.
