An Overview

Property Managers Ltd was formed in Tauranga in 1992 by Denis McMahon in response to the perceived need for an independent, professional service dedicated solely to the commercial property sector.
The company grew quickly based upon a philosophy of personal, professional service and quickly added syndication to its core business to meet the demand from satisfied clients for well-managed investments.
 
Property Managers has an enviable track record in terms of the performance of properties under its management over the last decade. In response to demand from clients satisfied with the Company’s management performance,  a sister company, Property Managers Syndications Limited, was formed to syndicate suitable properties to its client base.
 
The first such property was syndicated in 1994 in Tauranga and today is still producing a double digit return to the original investors (This doesn’t take into account the capital return).
 
The Company has syndicated twenty properties over the last thirteen years. Independence enables it to effectively network with all of the leading Real Estate Firms in terms of sourcing new tenants and obtaining market information used in the day to day management of the properties.
 
Whilst Property Managers Ltd has enjoyed steady growth it has not lost sight of the goal of personal, professional service and the idea of being in partnership with tenants. This philosophy and the people applying it are the keys to both the historical and the future success of Property Managers Limited.
 
The Scheme

The scheme that Property Managers uses for its syndications enables investors to retain their own Proportionate Title on an undivided share in the whole property with each individual title being issued in the name of the purchaser.

Such titles are registered through the Land Registry Office and can be sold or bequeathed as any other Certificate of Title. Many properties are now owned this way - good examples, in Tauranga for instance, are 143 Durham Street, 117 Willow Street, and the State Insurance Building. The form of title enables investors to participate in the better properties and still retain their own titles. There are no pre-emptive rights in the schemes administered by Property Managers Limited, which simply means that owners are under no obligation to sell back to the group and can sell or deal with their title as they see fit.

The owners appoint Property Managers Limited as the manager and must enter into the Management Agreement with respect to the property, known as the Terms and Conditions of Ownership.

The scheme is suitable for passive investors as the manager has the authority to deal with the day-to-day operation of the property and the scheme.
 
Proportionate Titles - The Benefits

A useful form of investment used today by property developers to enable many passive investors to invest in a commercial property is by way of proportionate titles. The commercial building is divided into a number of separate legal titles, and each proportionate title is for an undivided share in the freehold of the building.

By issuing the titles, investors are able to register on their own individual titles and the title can be sold as with any other Certificate of Title for land. This can give an investor more control over their own title and is more marketable than investment in unit titles or shares.

Under the Securities Act an Exemption Notice has been issued in respect to proportionate title investment schemes, in that while prospectuses do not have to be issued, the promoter is still required to comply with the Act by issuing an Offerer's Statement, which contains full information to the investor on the scheme and the risks involved. The Securities Act Exemption Notice sets out the requirements for the Offerer's Statement and any investor looking at purchasing a proportionate title should obtain from the promoter an Offerer's Statement before making the decision to invest.

By promoting a commercial investment by way of proportionate titles, investors are able to participate in the attractive returns that commercial property ownership can provide without heavy individual outlays of capital. It allows investors to hold a more diverse property portfolio, both geographically and in type of investment. This gives investors flexibility to invest in different properties, with the investors having the choice of how much to invest in each property.

Proportionate titles are more suited to the passive investors, as the day to day operation of the building and dealing with the tenants is attended to by a Property Manager on behalf of the Investment Group. This means that the investor is able to sit back and enjoy the return without the problems that might be encountered as an individual owner of a building in having to deal with tenants and maintenance problems on a day-to-day basis.

As a form of investment, proportionate titles have proved to be successful and provide an investor with a secure means of investment in a group investment scheme.