TAURANGA 20 April 2021 – Unlisted commercial property funds manager PMG Property Funds Management Limited (PMG) has fully subscribed an offer to raise $68 million in its flagship fund, Pacific Property Fund Limited (the Fund).
PMG Chief Executive Officer Scott McKenzie says the offer – in one of New Zealand’s largest directly-held and unlisted commercial property funds – is the largest opportunity the company has brought to market to date.
“Given the current low interest rate environment, the attractive return that Pacific Property Fund Limited is offering investors, and the Fund’s highly diversified nature, we knew there was going to be considerable interest from the public to invest,” Scott McKenzie says.
“We believe the speed at which the offer was taken up is a direct reflection of the track record PMG and our funds have demonstrated over time, and investors seeking out reliable alternatives to term deposits[1].
“On top of that, the recent restrictions and compliance pressures placed on the residential property investment market highlights the strength, historical resilience and ease of investing in an unlisted commercial property fund like Pacific Property Fund Limited.”
The Fund offers retail investors a strong comparable forecast gross cash dividends of 7.35 cents per share per annum paid quarterly, which at the current share issue price of $1.22 per share, represents a gross cash return of 6.02 per cent per annum (paid quarterly)[2].
From March 2021 to June 2021, the Fund expects to acquire six properties (with four of these properties to be acquired using the funds raised from the offer)[3]. Together, the six properties are valued at $128 million.
The properties to be acquired include two high-quality industrial properties (one in Christchurch and Wellington), two A-grade[4] and recently built office properties (Anderson Lloyd House and Nexia House) in Christchurch’s CBD, and two industrial properties in Auckland and Hamilton.
On settlement of all six properties, the Fund’s portfolio will consist of 20 quality commercial properties with 62 tenants located across the country, achieving a total estimated portfolio value of $393 million.
PMG’s Chairman of the Board, Denis McMahon, says he’s pleased to see the strong response to Pacific Property Fund’s latest offer.
“When we established the Fund in 2014, the aim was to grow a robust and diverse Fund which would withstand major economic downturns. I believe that the performance of the Fund through the pandemic in 2020 showed that we have succeeded in doing just that,” Denis McMahon says.
Since 1 April 2016, the Fund has delivered a higher than 10 per cent total annualised return to investors[5].
Pacific Property Fund Limited has also recently been rated the equivalent of a four[6] out of five-star rating regarding its high-quality investment offering by independent investment research house Research IP.
PMG plans to bring additional investment offerings to market this year in its five unlisted commercial property funds. Those interested to find out more information on PMG’s investment opportunities should contact PMG’s Investor Relationships Team on 0800 219 476.
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 property funds managers. For over 29 years, PMG has been invested in delivering long-term sustainability and value for investors through proactive commercial property management and investment.
PMG’s purpose is to create value and security for people in property, helping New Zealanders achieve financial freedom. It does this by offering a range of unlisted property funds, which cater for the differing needs of investors and provide them with choice, diversification (spread of risk) and regular income.
The funds PMG offers and manages on behalf of investors include: PMG Generation Fund, a fund designed to make commercial property investment possible for all New Zealanders; Pacific Property Fund Limited, a vehicle that invests in geographically and category diverse properties; and funds that invest in category specific assets, including PMG Direct Office Fund, PMG Direct Childcare Fund, and PMG Capital Fund Limited.
PMG is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds), which invest in, or own, real property in New Zealand.
Disclaimers
[1] https://www.interest.co.nz/sav...
[2] The forecast gross cash return is for the prospective period ending 31 March 2022. It is stated before tax, based on forecast gross dividends per annum of 7.35 cents per share, and expressed as a percentage of an expected share issue price of $1.22 per share. The most recent details on how forecast gross cash return is calculated, and the risks associated with an investment in Pacific Property Fund Limited, is available in the latest Product Disclosure Statement for the Fund, available for viewing on the Disclose Register at http://disclose-register.companiesoffice.govt.nz/ by searching for the latest offer.
[3] The four properties being acquired with funds from the offer are 3 Distribution Lane, 410 Eastern Hutt Road, 70 Gloucester Street and 123 Victoria Street, all to be acquired between 30 April 2021 and 30 June 2021. The two remaining property acquisitions are not dependent on the outcome of the offer (102 Langley Road was successfully purchased in March 2021, and 400 Arthur Porter Drive is due to be purchased on or before 30 June 2021).
[4] In 2015, Anderson Lloyd House won an award at the Property Council of New Zealand Awards. Both Anderson Lloyd House and Nexia House have independently assessed seismic ratings of at least 100% New Building Standard (NBS).
[5] Gross internal rate of return to an investor including gross cash dividends and increases in the board approved share price over time. Presumes purchase of a share in Pacific Property Fund Limited at the Board approved share price on 1 April 2016 of $1.00, continuous ownership of that share to 30 April 2021, receipt of quarterly gross cash dividend returns from the quarter ending 30 June 2016 to the forecast dividend return for the quarter ending 31 March 2021, and increases in the board approved share price over time, including a forecast price of $1.22 per share on 30 April 2021. Past returns are not an indication of future results. Pacific Property Fund is an equity issuer and not classed as a Managed Investment Scheme.
[6] ResearchIP - Qualitative Fund Research (5 March 2021). This rating has been rounded up to the nearest star – Pacific Property Fund Limited is rated 3.99 stars out of 5.
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