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PPF to become one of largest unlisted property portfolios

PPF to become one of the largest unlisted property portfolios

AUCKLAND, October 6 - Today Pacific Property Fund Limited (Pacific Property), managed by Property Managers Group (PMG), has announced a new offer to the market which will see the company become one of the largest unlisted property investors in New Zealand, not including private trusts.

Pacific Property is issuing 24 million shares under the offer at an issue price of $1.02 price 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 one of 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 across geographies including Whangarei, Auckland, Hamilton, Tauranga and Taupo.

Chief executive of Property Managers Group, 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 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 occupies over two hectares of land which 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,[1]” says McKenzie.

Anchored by three major tenants, Countdown, Mobil and McDonalds, and supported by 32 smaller speciality, 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 here (www.propertymgr.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 info@propertymgr.co.nz. Alternatively, the PDS and its accompanying documents are available online at www.business.govt.nz/disclose (OFR 12122). The offer formerly closes on 22 November 2017.

About PMG

Property Managers Group (PMG) is one of New Zealand’s most established and trusted private property and fund managers. For 25 years PMG has been invested in delivering long term sustainability and value for investors through proactive management and portfolio diversification.

PMG’s mission is to create value 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 manages on behalf of investors includes Pacific Property Fund Limited, a vehicle which invests in geographically and category diverse properties, two funds which invest in category specific properties such as PMG Direct Office Fund and PMG Direct Fund, and a private equity fund, PMG Capital Limited.

[1] Statistics NZ

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