Unlisted commercial property outperforms most asset classes[1]
TAURANGA, 13 March 2019 – Today, property fund manager PMG brings to market an opportunity for retail investors to invest in its AA rated, unlisted commercial property portfolio, PMG Direct Office Fund.
The Offer comes as investment fund manager, Mercer’s, 2019 Annual Investment Returns report shows directly-held (unlisted) New Zealand property has been the highest performing investment class, except for global private equity, throughout 2018 in New Zealand and globally, [2] in the asset classes the manager reports on.
PMG chief executive, Scott McKenzie, says its unlisted PMG Direct Office Fund has also performed strongly since its inception in late 2016.
“PMG Direct Office Fund is a dedicated office property, investment vehicle, diversified by geographies and tenants and delivers a projected pre-tax cash distribution return of 6.7% per annum (7.50 cents per Unit at $1.12 per Unit), which is currently higher than a number of asset classes,” says McKenzie.
“In 2017, PMG Direct Office Fund delivered total returns of 10.00 cents per unit (cpu), and 14.50 cpu in 2018,” he says.
PMG’s latest offer in PMG Direct Office Fund will help finance the acquisition of two quality office properties one with an accompany carpark building at 410 Victoria Street in Hamilton (the Kiwibank building) and 65B Main Highway in Ellerslie in Auckland – a building 100% occupied ( 87% is by government tenants). The fund will also acquire a car park at 12 Alma Street, Hamilton which provides additional parking to the Kiwibank building.
The total value of the acquisition properties is $29.74 million. PMG Direct Office Fund is offering 18,000,000 units at $1.12 per unit with a minimum investment of 10,000 units and tranches of 5,000 units thereafter, which together with bank borrowings will fund the acquisitions.
“Investing in an unlisted commercial property fund like this is intended to give investors passive income through regular monthly cash returns, achieved through tenant, building and geography diversification.
“Our investors tell us they like the fund model which assists in both preserving and growing their capital whilst minimising volatility which we are seeing in the share market currently and avoiding the headwinds evident in the resident property market,” McKenzie says.
“PMG Direct Office Fund is unique in the marketplace. Its strategy is to acquire properties where value can be added through proactive asset management, through a repositioning or refurbishing of the asset and taking a partnership approach with our tenants for long term mutual benefit.
“This provides our investors with the opportunity for greater returns over time, compared to many buildings where there is little chance to add value.
“Being able to add value to investments is important, especially when the economy and markets are showing volatility. A fund structure like PMG Direct Office Fund provides greater ability for us to counter any reducing market values, due to economic correction. Bricks and mortar have stood the test of time as a robust investment class protecting investor capital,” he says.
“We believe that unlisted diversified commercial property offers an attractive defensive investment option, as part of an investor’s overall portfolio, for both the current, and what could be more challenging, economic conditions in the future,” says McKenzie.
Following the successful completion of this offer, the total value of PMG Direct Office Fund will be $81m, with a portfolio of 7 properties, tenanted by a mix of 53 quality tenants.
Those interested in the offer can download a Product Disclosure Statement by visiting www.pmgfunds.co.nz or by contacting Matt McHardy in Tauranga on 021 193 4550, or Mat Harvie in Auckland on 027 549 7229. The offer will open on 18 March 2019. Applications to acquire units must be received no later than 5:00pm on 12 April 2019. This offer is not available to investors outside of New Zealand.
For media enquiries please contact:
Bridget Lem Head of Communications PMG
P: +64 21 060 6082 E: bridget.lem@pmgfunds.co.nz W: www.pmgfunds.co.nz
About PMG
PMG is one of New Zealand’s most established private property funds managers. For over 26 years, PMG has been invested in delivering long term sustainability and value for investors through proactive management and portfolio diversification.
PMG’s purpose is to create value and security for people in property. It does this by offering a range of property portfolios which cater for the differing needs of investors providing them with choice, diversification and sustainable income.
The portfolios PMG offers and manages on behalf of investors includes Pacific Property Fund Limited, a vehicle which invests in geographically and category diverse properties, and portfolios which invest in category-specific assets including PMG Direct Office Fund, PMG Direct Childcare Fund, and PMG Capital Fund Limited.
PMG is the first unlisted property and funds manager to receive two “AA" ratings for its retail investment funds, Pacific Property and PMG Direct Office Fund, by NZX-owned ratings agency, FundSource.
PMG is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) (‘schemes’) which invest in or own, real property in New Zealand.
[1] https://www.mercer.co.nz/content/dam/mercer/attachments/asia-pacific/NewZealand/Investments/2019/NZ_Periodic_Table_2019_Interactive.pdf
[2] https://www.mercer.co.nz/content/dam/mercer/attachments/asia-pacific/NewZealand/Investments/2019/NZ_Periodic_Table_2019_Interactive.pdf
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