Pacific Propertys latest public offer represents the largest single property acquisition in PMGs history.
26 October 2017
We are pleased to announce that Pacific Property Fund Limited (Pacific Property), has a new offer to the market which will see the property investment portfolio become one of the largest in New Zealand, not including private trusts.
Pacific Property is issuing 24 million shares under the offer at an issue price of $1.02 per share, with a minimum investment of 20,000 shares and parcels of 10,000 shares thereafter. The target cash distribution return is 7.20 cents per share for the full year to 31 March 2019.
Currently Pacific Property has a total asset value of $74.3m under management; this latest offer and acquisition will increase its value to $114.6m. The funds raised, alongside bank borrowings, will be used to acquire the Kelston Shopping Centre in West Auckland.
Director of Pacific Property, Denis McMahon, says he is delighted to see Pacific Property reach such a milestone.
“It was our strategy from the outset to grow Pacific Property into the largest unlisted diversified property portfolio in New Zealand,” McMahon says.
“An investment vehicle of this size and diversification provides our investors with strong, sustainable returns over time, growth in value over time, and improved liquidity and we are proud to be delivering on our promises,” he says.
Pacific Property is a diversified investment portfolio of industrial, retail and office properties spread across locations including Whangarei, Auckland, Hamilton, Tauranga and Taupo.
PMG CEO, Scott McKenzie, says this latest offer cements Pacific Property as a significant and robust investment vehicle in New Zealand and recognises PMG’s successful management approach.
“In today’s rapidly changing global economic environment, influenced by technological disruption and geopolitical risks, customer demand and the market for your product can change quickly,” says McKenzie.
“This is one of the main reasons why PMG has focused on building Pacific Property into a highly diversified investment portfolio, which offers greater autonomy to anticipate market changes and adapt quickly.”
“Having multiple tenants and multiple properties in an investment portfolio means total income is less likely to be as affected by the loss of a single tenant or an unforeseen event. This results in more reliable and sustainable returns, attracting more investors to invest, which then results in providing greater liquidity for the underlying shares,” he says.
“We also maintain a conservative level of bank gearing compared to other peers in the market. This ensures the portfolio is well positioned to weather any economic clouds that may roll across the horizon and better look after our investors’ interests,” says McKenzie.
Pacific Property’s purchase of the Kelston Shopping Centre will take the total number of properties it owns to nine, which will include a total of 75 tenants (with a 97% occupancy rate) on a weighted average lease term (WALT) of 7.53 years.
“Located on the corner of two main arterial routes in West Auckland, just off the South Western Motorway and only 15 mins to the CBD, Kelston Shopping Centre represents an excellent opportunity to add further value for Pacific Property,” says McKenzie.
“The surrounding area is now predominantly designated under Auckland’s Unitary Plan as Terrace Housing and Apartment Buildings and the population is forecasted to grow by close to 30% in the next 15 years, ” says McKenzie.
Anchored by three major tenants, Countdown, Mobil and McDonald’s, and supported by 32 smaller specialty, medical, food, beverage and convenience stores, PMG plans to undertake strategic improvements to the Centre and will look to offer more health and community services-related tenants, with a medical centre taking up a lease in the Centre from November 2017.
Those investors interested in the offer can download the Product Disclosure Statement (PDS) and register their interest online (www.pmgfunds.co.nz), contact the selling agents, Matt McHardy on 07 929 7109 (in Tauranga) or Mat Harvie on 09 283 0222 (in Auckland), or email firstname.lastname@example.org.
Alternatively, the PDS and its accompanying documents are available online at www.business.govt.nz/disclose (OFR 12122).
The offer formally closes on 22 November 2017.