PMG Closes Investment Offer In Hawkes Bay Large Format Retail Property

Unlisted commercial property funds manager, PMG Property Funds Management Limited (PMG), has now closed its latest investment offer in its PMG Generation Fund to acquire a high-profile large format retail property in Hastings, predominantly tenanted by Farmers, one of the most established retailers in the country.

Funds raised by the offer have been used by PMG Generation Fund to purchase the Hastings retail property for a total of $26.95 million.

This capital raise now brings the total portfolio value of the Fund to $203.6 million. The Fund offers a commercial property portfolio of six quality industrial and large format retail properties, diversified by building, tenant, geography and sector, located within main metropolitan centres across 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 resilience for investors.

PMG Chief Executive Officer Scott McKenzie says there was a strong response from investors across New Zealand, as more people seek to further diversify their investment portfolios to include asset classes like unlisted commercial property. Property is an important and desirable asset class to invest in, which protects well against inflationary pressure and has recently demonstrated significant valuation growth.

“While term deposits in the bank typically don’t perform well in inflationary periods like this, commercial property can offer a safe harbour for capital preservation. With the market change, we have seen a growing number of our clients cashing up their residential properties to reinvest in our PMG Generation Fund, and move their capital into a passive investment option.”

PMG Generation Fund was again available for the second time on investment platforms, Sharesies and InvestNow, directly aligning with the Funds strategy to provide everyday New Zealanders access to diverse large scale commercial property, an initiative that has seen PMG’s peers follow suit.

Following the successful investment offer close, McKenzie indicated PMG is looking to execute its portfolio diversification strategy for PMG Generation Fund.

“With circa $20 million over-subscribed, PMG intends to acquire other property and property investments this year. This follows a recent licence variation which enables PMG Generation Fund to also invest in other PMG funds for the first time, and directly held property investments and indirectly held property investments, potentially providing income resilience for our investors and offering, on a look through basis, exposure to a much more substantial commercial property portfolio.”

Since inception, PMG Generation Fund has performed well with a total annualised gross cash return, including unrealised capital growth, of 12.9 per cent projected for original investors*. Investors also have the choice of reinvesting the monthly income the Fund provides into PMG’s Reinvestment Plan, so they may enjoy the benefits of compounding returns for years to come.

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