PMG completes investment offer for large scale retail property in Hawkes Bay

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Unlisted commercial property fund manager PMG Property Funds Management Limited (PMG) has now completed its latest investment bid for its PMG Generation Fund to acquire a high profile, large format retail property in Hastings, which will be predominantly leased from Farmers, one of the most established retailers in the Country.

The funds raised by the offering were used by the PMG Generation Fund to purchase the Hastings retail property for a total of $26.95 million.

This capital increase now brings the fund’s total portfolio value to $203.6 million. The fund offers a commercial real estate portfolio of six high quality industrial and large scale retail properties diversified by building, tenant, geography and sector, located in major metropolitan areas in New Zealand. The commercial properties have notable tenants including Coca-Cola Amatil, Rentokil, Torpedo7 Limited, Countdown, Kmart and BP, potentially demonstrating the Fund’s income stability for investors.

Scott McKenzie, PMG’s Chief Executive Officer, said there has been a strong response from investors across New Zealand as more people seek to further diversify their investment portfolios to include asset classes such as unlisted commercial property. Real estate is an important and desirable asset class to invest in that is well protected from inflationary pressures and has recently seen significant valuation growth.

“While bank term deposits typically don’t do well in times of inflation like this, commercial real estate can provide a safe haven for capital preservation. As the market shifts, we are seeing an increasing number of our clients forfeit their homes to reinvest in our PMG Generation Fund and convert their capital into a passive investment option.”

The PMG Generation Fund was available again for the second time on the investment platforms Sharesies and InvestNow and was directly based on the fund’s strategy of giving New Zealanders access to various large-scale commercial properties on a day-to-day basis.

Following the successful completion of the investment bid, McKenzie indicated that PMG intends to implement its portfolio diversification strategy for the PMG Generation Fund.

“With an oversubscription of approximately $20 million, PMG intends to acquire additional properties and real estate investments this year. This follows a recent license change that allows PMG Generation Fund to also invest in other PMG funds and directly held real estate investments and indirectly held real estate investments for the first time, potentially offering our investors income security and offering on an look-through basis: Exposure to a lot more extensive commercial real estate portfolio.”

Since inception, the PMG Generation Fund has performed well with an annualized gross cash return, including unrealized capital growth, of 12.9 percent, which is projected for original investors*. Investors also have the option to reinvest the monthly income provided by the fund into PMG’s reinvestment plan, allowing them to reap the benefits of compounding returns for years to come.

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