PMG Generation Fund Offers Investors 5.5% P.a. Return
High performing property fund set to acquire prime Wellington industrial property and Bethlehem Town Centre in Tauranga
PMG Property Funds Management Limited (PMG) has opened another exciting opportunity to invest in PMG Generation Fund, which offers a mix of industrial, retail and office properties, and is set to acquire two sought-after properties in Wellington and Tauranga.
Open to all New Zealanders, PMG is offering investors between 63 and 69 million units ($68.67m to $75.21m) at $1.09 per unit in PMG Generation Fund (offer). It comes with an accessible minimum investment threshold of 1,000 units ($1,090) and parcels of 1,000 units thereafter, from now until 5pm 29 July 2021 (or earlier if the offer is fully subscribed).
Funds raised by the offer, with conservative bank borrowings, will be used by PMG Generation Fund to acquire an industrial property at 11-13 Gough Street in Seaview, Wellington, and the high-profile Bethlehem Town Centre in Bethlehem, Tauranga for a total of $107.6m*.
PMG Chief Executive Officer and Director Scott McKenzie says the two properties have a very high occupancy rate with recognised national and multi-national tenants including Kmart, Countdown, BP, Chemist Warehouse and Smiths City (at Bethlehem Town Centre), and HJ Asmuss & Co (in Gough Street) – a privately owned supplier and distributor of steel in New Zealand with previous clients and projects including Fonterra and the Forsyth Barr Stadium.
The acquisition of Bethlehem Town Centre means this popular and high-performing large format retail centre will now be owned by New Zealand investors.
“We are particularly excited to be providing New Zealanders, including our hometown Bay of Plenty residents, the opportunity to invest in their own backyard and in a high-quality and well-known property at the heart of one of Tauranga’s fastest-growing suburbs,” McKenzie says.
The purchase of 11-13 Gough Street in Wellington will also provide additional rigour and diversity to PMG Generation Fund’s portfolio.
“The property is close to main arterial networks and is fully leased to Asmuss, a business that was founded in 1920 and has occupied this property for over 20 years, making it an excellent prospect for our investors,” McKenzie adds.
PMG launched PMG Generation Fund in 2020 with the aim of helping more New Zealanders gain access to the benefits of investing in commercial property, providing regular income and the opportunity for good capital growth on their investment. Additionally, investors have the choice of reinvesting the monthly income the Fund provides into PMG’s Reinvestment Plan, so they can enjoy the benefits of compounding returns.
Following this offer and acquisition of the two properties, the total portfolio value of the Fund will be $166m*, comprising of five quality commercial properties. With each property located within main metropolitan centres across New Zealand, the Fund is further underpinned by notable tenants, including some that are classed as essential services, providing further confidence around the Fund’s income resilience for investors.
Denis McMahon, founding Director and Chairman of PMG, says the quality and scale of the two intended acquisition properties located in Tauranga and Wellington align with the Fund’s strategy – to grow a portfolio of strategically selected assets that provide building, tenant, sector and geographic diversification.
Since its inception, PMG Generation Fund has delivered a gross cash distribution return of 5.80 cents per unit to its original investors and has seen a significant increase in the value of its underlying property assets. With a forecast gross cash return of 5.5% p.a. , paid monthly, this offer delivers an attractive passive income so investors can enjoy the lifestyle they love, well into the future.
“New Zealanders love land, bricks and mortar but growing headwinds in residential property investment is now making commercial property a more sought-after investment option,” McKenzie explains. “Historically low interest and term deposit rates mean investors are looking elsewhere for compelling returns.”
According to McKenzie, local investors see New Zealand commercial property as a good place to invest their capital for the long term as a natural hedge against inflation and for regular returns.
“Our last two investment offers in two of our unlisted commercial property funds were fully subscribed well before the offer close dates. Not only are we seeing more demand from investors in our funds, it is coming faster and in larger parcels.”
Those interested in the offer can download a Product Disclosure Statement free of charge by visiting www.pmgfunds.co.nz or by contacting PMG’s Investor Relationships Team on 0800 219 476.
The offer is expected to open from Thursday, 10 June 2021. Applications to acquire shares must be received no later than 5.00pm 29 July 2021 (or earlier if the offer is fully subscribed). This offer is not available to investors outside of New Zealand.
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The offer is for units to be issued in PMG Generation Fund by PMG Property Funds Management Limited. The offer is for units to be issued in PMG Generation Fund by PMG Property Funds Management Limited. A Product Disclosure Statement for the offer is available and can be obtained by visiting www.pmgfunds.co.nz. Prospective investors are recommended to seek professional advice from a Financial Advice Provider who takes into account an investor’s personal circumstances. Neither PMG Property Funds Management Limited or the PMG Investor Relationships Team provides financial advice. No person may offer, invite any offers or distribute any documents (including a Product Disclosure Statement) to any person outside New Zealand without the approval of PMG.
* The Fund Investment Metrics assume, amongst other factors, ownership of the Fund’s existing properties, successful completion of the offer, and the acquisition of the Fund’s two target properties. The valuation of the existing properties is $58 million. Information has been extracted from the PDS dated 10 June 2021, and is forecasted as at 30 July 2021.
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, including helping New Zealanders achieve financial freedom. It does this by offering a range of unlisted commercial property funds, which cater for the differing needs of investors and provide them with choice, diversification (spread of risk by having a number of properties) 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 fund which invests in geographically and category diverse properties; and funds which 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.