News

I joined the PMG team at the end of 2016. I am excited to add value with my extensive administrative experience, to a growing, successful team. Both my organisational skills and great time management are highly appreciated by the team and our clients!

What were your previous roles?
Prior to starting with PMG, I immigrated from South Africa in 2007 and took up a position at KPMG Chartered Accountants as a personal assistant to two Partners, two directors, various managers, and a rapidly growing team of accountants. My key responsibilities included risk management administration, administration of office systems and processes, company office administration, maintenance of a large client database, as well as the role of a personal assistant.

How did you hear about PMG?
Property Managers Group was a client of KPMG and I was involved in a few pieces of work for PMG. I also kept in touch with Nigel Lowe, PMG Chief Financial Officer when he moved across from KPMG to PMG.

What attracted you to working with PMG?
Nigel had spoken about the great team environment, and the directors’ enthusiasm, drive, and professionalism. I wanted to be part of a hardworking, high performing team with good values and genuine relationships with its clients.

What do you bring to the PMG team?
The AML /CFT space is rapidly changing and I aim to a provide our investors with a simple step-by-step process to getting compliant. I always aim to make it easier for our customers to do business with us by providing efficient and high-quality service.

What are you passionate about?
I love hanging out with my children (Matt 23 and Que-ann 19) – whether it be going out for breakfast together on a Saturday morning or having them over for dinner and board games. I love my sport (hockey, netball, yoga, lawn bowls) and being outdoors. In summer, most evenings you will find me walking up the Mount.

I joined the PMG team in March 2017 in the Auckland office to take on the role of Sales & Investment Manager. PMG has a fantastic work culture and strong focus on client satisfaction. This combined with a growing workforce and client base, is great to be a part of!

What were your previous roles?
Whilst completing my Bachelor of Commerce in Dunedin, I was lucky enough to represent Otago in cricket for 8 years. As a working professional, I worked for ANZ and BNZ with my most recent roles being to manage customer relationships and to improve profitability and customer satisfaction. These roles enabled me to get a strong understanding of deal structuring, business drivers, managing cashflow and how to best deal and manage market forces with businesses typically turning over $10-50m.

How did you hear about PMG?
I was introduced to PMG through a previous cricket team mate – Nathan McCullum. Long story short, after meeting the team and understanding PMG’s vision it’s a decision I am very pleased to have made.

What attracted you to working with PMG?
The people and the quality of investment options. The diversified investment funds that PMG offer has the best interests of investors at heart. When you are being trusted with investors hard-earned money it’s important to believe that what you are offering is sustainable and that investment risk has been well managed
– PMG’s investment funds model does just that.

What do you bring to the PMG team?
Energy and an attitude to give it 100%. I have been lucky to meet and work with many successful businesses and professionals in Auckland. I look forward to growing the PMG footprint in this region and beyond.

What are you passionate about?
Spending time with family and friends, fishing and golf. I am always looking to learn, and currently I am training to be an Authorised Financial Advisor on top of my day job. I also have two kids under 4 years of age, so you could say I’m a busy father!

PMG’s Head of Sales & Investment Products, Matt McHardy, is a familiar voice and face to many loyal PMG investors. You may have recently heard from him on two new PMG offerings, PMG Capital and PMG
Direct Childcare Funds.

For the last two years he’s been the voice on the phone or in presentations and meetings discussing PMG’s investment opportunities.

Since joining PMG in 2015 Matt has worked tirelessly to shape and enhance PMG’s relationship management processes and services for investors, with great results.

Quickly establishing relationships, Matt has become the dedicated point of contact for investors to get information on PMG products, and has developed a robust secondary market which has significantly improved investors’ ability to liquidate their investments.

“Our recent investor surveys show that not only are our investors happier with the level of care and attention we are providing them, but that they are investing more with us more regularly than before, and we are also receiving more referrals from them,” says Matt.

“This is really humbling. Ensuring we are delivering on our promises to our loyal existing investors is the most important element of my team’s role.”

“We’re also thrilled to be placing an even greater focus on delivering exceptional, investment services to investors with the recent appointment of two new members to PMG’s sales and investment team,” says Matt.

Experienced business banking professional, Mat Harvie, (yes there are now TWO Mat(t)s in the team) joined PMG at the start of 2017 as sales and investment manager.

His role is to support the growing interest in PMG’s offerings from investors in Auckland and Northland. Based in PMG’s Auckland office in Newmarket, Mat Harvie has come from a strong corporate banking career with BNZ and ANZ, where he looked after large business clients.

Mat has a strong network of investors in the Auckland region and brings to PMG exceptional and professional relationship management skills and an in-depth understanding of financial products.

Sally Lavis also joined PMG in the Tauranga office in late 2016, as Compliance and Administration Associate, supporting Matt and Mat and specifically helping PMG investors navigate their way through the anti-money laundering requirements.

“Sally’s role is key to removing some of the pain points for investors when it comes to complying with anti-money laundering legislation,” says Matt.

Originally from South Africa, Sally spent the last decade at KPMG in Tauranga. Sally is renowned for her strong client relationship, communication, and time management skills as well her exceptional ability to multitask. Her process driven mindset makes her the perfect fit for the Compliance and Administration Associate role.

While the sales and investment team is charged with bringing in new business for PMG, the most important remit for the team is, first and foremost, to ensure our existing and loyal investors are given the first priority and care.

If you are interested in hearing more from PMG’s investment sales team about PMG Direct Childcare or any other PMG offering, please contact Matt McHardy in Tauranga on 07 929 7109 or Mat Harvie in Auckland on 09 283 0222.

We are pleased to announce that we have secured an unconditional agreement to purchase the Kelston Shopping Centre in West Auckland for one of our diversified investment funds, Pacific Property Fund Limited (Pacific Property).

Secured as an off-market acquisition, it is the largest single purchase in PMG’s 25- year history. We will be offering interested investors the ability to participate in a new Share Offer by Pacific Property in September, following the registration of a Product Disclosure Statement (PDS).

Head of Sales & Investment, Matt McHardy, says Kelston Shopping Centre presents an exciting opportunity for investors.

“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, the surrounding area is now predominantly designated under Auckland’s Unitary Plan for further intensification,” says McHardy.

“This means a greater density of homes can be built around the shopping centre. Auckland Council has identified Kelston as a key suburb to facilitate intensification over the next decade which will have a positive impact on the centre.”

“The Kelston Shopping Centre’s immediate primary catchment area is expected to grow by 29% to 42,000 by 2043. Within this catchment, local resident purchasing power is estimated to increase 17% from $780 million in 2014 to $910 million in 20234,” says McHardy.

Investors wishing to indicate their interest to participate in Pacific Property’s Share Offer, to assist with the acquisition of the Kelston Shopping Centre, can contact PMG’s Head of Sales and Investment, Matt McHardy on 07 929 7109, or Sales Investment Manager, Auckland, Mat Harvie on 09 283 0222.

DISCLAIMER
Pacific Property Fund Limited is seeking preliminary indications of interest in a proposed offer of shares (offer). Indications of interest may be registered by contacting Matt McHardy or Mat Harvie.
Indications of interest will not involve an obligati ffer. If the Offer is made, it will be made in accordance with the Financial Markets Conduct Act 2013.
The selling agents are not providing personalised advice. As such, prospective investors are recommended to seek professional advice from an authorised financial adviser which takes into account
their personal circumstances before making any investment decision. The selling agent will make a copy of the Product Disclosure Statement and Adviser Disclosure statement available for all
prospective investors on request and free of charge.

PMG Direct Childcare Fund launches as part of PMG’s portfolio diversification strategy.

You may recall in the March edition of Property Line, I tackled the issue of how we can prepare and help family members and future generations build their own wealth. This is in a world where the costs of living are skyrocketing, in large part thanks to house prices, with ‘experts’ commenting that younger generations are very unlikely to own their homes in the future.

For me this all comes back to education. Providing a safe, nurturing, engaging and quality learning environment from an early age is essential to creating a love for lifelong learning and attainment. I believe a quality education should be accessible to all New Zealanders.

As a business PMG recognises the importance of education from a young age and is thrilled to announce the launch of PMG Direct Childcare Fund. Its launch is in direct response to the shortage of quality early learning centres which currently exists, particularly in our main cities. In rapidly growing urban areas, parents are demanding new and purpose-built facilities, evidenced by growing waiting lists as parents return to work sooner.

As mentioned in March the NZ Government is also investing in early learning through the provision of subsidies and has committed an additional $396 million in the 2016 budget to fund care for an extra 14,000 children by 2019/2020.3 This takes the total investment in the sector from $860 million in 2008 to $1.8 billion in 2017.

PMG Direct Childcare Fund is partnering with experienced planners and developers to acquire or design, build and proactively manage purpose-built, industry-leading early learning centres nationwide. PMG has secured two new-build early childhood education properties (with a third in the wings) to be acquired by the Fund, in Auckland and in Christchurch. These will be run by two of the best and most experienced childcare centre operators in the country.

The Fund is now open to eligible wholesale investors and is offering up to 10 million units to be issued at $1 per unit. We are targeting a strong year-one gross distribution return of 6.5cpu* per annum for the full financial year to 31 March 2019. The Fund is targeting a 10%** internal rate of return for the full financial year to 31 March 2019.

We’re thrilled to be providing parents, grandparents and clients the opportunity to invest in the education of the future generation - a cause many of us are very passionate about.

The centres within PMG Direct Childcare Fund will be innovation-led centres, purpose-built from the ground up, both in terms of facilities and interior as well as from an educational perspective. This means the operators can focus on delivering exceptional learning opportunities for youngsters in their care.

The centre operators will be secured on long-term lease contracts to provide secure and stable income for investors.

The PMG Direct Childcare Fund is part of PMG’s wider strategy to provide a diversified portfolio of funds. This ensures our investors enjoy greater choice, improved liquidity, and long-term sustainable returns – a strategy that we’ve been successfully deploying for over 25 years.

The Information Memorandum (IM) for PMG Direct Childcare Fund is available to existing and new eligible wholesale investors and the offer formally closes on August 11, 2017.

To receive copies of the IM or to register your interest see www.propertymgr.co.nz or contact Matt McHardy on 07 929 7109 (in Tauranga) or Mat Harvie on 09 283 0222 (in Auckland) or email info@propertymgr.co.nz

2You can view it here online at http://www.propertymgr.co.nz/news-story/id/211
3http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11794286

DISCLAIMER
*Target distribution return for the full financial year to 31 March 2019 stated net of expenses but before tax and performance fees, fair value derivative gains/losses and asset revaluations. The
payment of distributions is at the discretion of the Manager and is dependent on a number of factors, including meeting appropriate solvency requirements and successful completion of the
development of ELE properties being owned by the Fund. Distributions are, therefore, not guaranteed and no distributions are expected to be paid for the full financial year to 31 March 2018.
**Equivalent annualised internal rate of return net of expenses but before tax and performance fees for the full financial year to 31 March 2019.
The projected gross distribution is indicative only. The return is not guaranteed by any person.
Eligible wholesale investors refers to persons who fall within the definition of “wholesale investor” under the Financial Markets Conduct Act 2013. Further information on the definition of “wholesale
investor” will be set out in the information memorandum which will be provided on request to prospective investors. The Fund is not open to retail investors.
Property Managers Group is seeking preliminary interest in the Offer. Indications of interest can be made by contacting the Sales and Investment team. No money is currently being sought and no
investment interests can be applied for or acquired. No indication of interest will involve an obligation or commitment to acquire the financial products being offered.
Prospective investors are recommended to seek professional advice from an Authorised Financial Adviser, which takes into account their personal circumstances. The Sales team is not providing
personalised advice.

Compliance: “The act of conforming, acquiescing, or yielding. Cooperation and obedience; compliance with the law is expected of all.” http://www.dictionary.com/browse/compliance

Whatever the meaning, for most, compliance means a heck of a lot of work, crossing t’s and dotting i’s, checking, authenticating, verifying and timeconsuming paperwork. And, if one thing is for sure, it’s here to stay.

Regardless, when it comes to investing, compliance with the law is paramount. It ensures ethical processes are undertaken, investors funds are protected and there is transparency by all.

PMG Chief Financial Officer, Nigel Lowe, says PMG takes compliance very seriously.

“Over the past six months we have invested in strengthening our in-house risk and compliance team and have worked hard on developing a robust process to alleviate some of the compliance pain for our investors,” Nigel says. “We’ve used technology to streamline the rigorous ‘form-filling’, that is required under the new anti-money laundering (AML) laws which came into effect last year, to speed up the process and prevent repetition for our investors who make more than one investment with us.”

“A large part of my role since joining PMG last year has been to reinforce our capabilities in this space. We’ve hired Sally Lavis in the role of Compliance and Administration Associate, who is dedicated to helping PMG investors navigate their way through the anti-money laundering requirements. We know we’re making it easier for our investors as a result,” he said.

In January 2018, the AML regulations will be extended to include lawyers, accountants and financial advisors, meaning they will be subject to the same scrutiny when advising and investing on behalf of clients.

“PMG has just been audited by an independent auditor who has given us an excellent rating when it comes to our compliance processes,” says Nigel.

“We know our practices are right up there with best practice and we have the skills and systems in place to also help professional advisors manage their compliance processes when these new laws extend to them next year,” he says.

Last year PMG became one of only a handful of unlisted property and fund managers to attain a ‘Managed Investment Scheme’ Licence from the Financial Markets Authority. This means investors can rest assured PMG is being managed with absolute integrity, transparency, and is invested in continuing to provide exceptional governance across all of our investment offerings.

If you would like more information on PMG’s compliance and AML processes please contact Sally Lavis on sally.lavis@propertymgr.co.nz or 07 578 3494.

DISCLAIMER
The views and opinions expressed in the article are those of Nigel Lowe solely. This is not personalised investment advice and readers should always consider taking professional advice before
making any investment decision

Over the last two years PMG has been through some exciting and significant changes to improve the value we bring to the funds and properties we manage.

The total focus of these changes has been to grow the value of our clients’ investments, while ensuring we respond effectively and proactively to changing market and regulatory conditions.

Below is a brief recap of our journey as a management company and the changes we’ve implemented over the past two years.

2015
• Daniel Lem joined PMG as Director & Head of Investment bringing a number of properties to PMG’s portfolios, as well as his skills in asset acquisition and project management.

2016
• PMG invests further in technology and systems to improve efficiency and manage increasing compliance requirements and costs.
• Nigel Lowe joined PMG as Chief Financial Officer to strengthen PMG’s in-house finance team.
• Single-property syndications transitioned into Fund structure.
• Largest single capital raise achieved by PMG - $45m.
• PMG became licensed as a manager of Managed Investment Schemes by the Financial Markets Authority (FMA)* – one of only a handful of New Zealand companies to do so.

What does our journey look like going forward?
In 2017 PMG’s investment strategy remains the same: To deliver long term sustainability and value growth for investors through proactive management and portfolio diversification.

Given global economic uncertainty, volatility and a continually changing geopolitical landscape, focusing on greater diversification is now essential in managing investment risk.

Our strategy to achieve greater diversification is to create a range of sector or segment specific property investment portfolios. Within each investment portfolio we acquire multiple quality properties offering a diversity of buildings and tenants, which creates a robust investment vehicle offering greater economies of scale, more reliable cashflows and improved liquidity.

Over recent years the cost of property acquisitions has increased due to increasing compliance, due diligence and capital raise costs. This is consistent with our peers in the industry. PMG’s strategy to establish and grow a portfolio of sector or industry specific investment funds, using economies of scale to acquire larger assets, or multiple assets together, results in keeping overall establishment costs down, and therefore improves value for investors.

PMG’s innovative selection of property portfolios caters for the differing needs of investors, providing greater choice, value and reduced risk through improved liquidity, diversification and sustainable income over time.

What does this mean for existing PMG managed investment portfolios?
For PMG’s diversified fund (Pacific Property Fund Limited), our strategy is to grow its market value to around $250m through acquiring quality properties over time, whilst maintaining a sustainable return and achieving growth in value. Our research shows that this size will provide the best relative and sustainable return to investors, as well as reduced risk and improved liquidity.

To date the year-on-year performance of Pacific Property has consistently exceeded expectations, and we are optimistic about delivering increased and sustainable returns as we continue to grow our asset base.

For PMG Direct Office Fund, our aim is to grow the Fund’s market value to around $250m also, a value which will provide the optimum number of investors and level of
autonomy within the fund.

Finally, this month’s launch of PMG Direct Childcare Fund is an exciting new offering by PMG, which provides investors with an alternative investment choice, with secure and competitive long-term returns, as well as the chance to participate in the future of New Zealanders – a cause we know many of our investors are passionate about.

PMG Capital Fund is a property, private equity fund established to create value through shorter term transactions and facilitate the acquisition of quality properties into our investment funds to hold for the long term. With a transparent and defined exit strategy, the creation of PMG Capital Fund represents a win-win scenario for PMG’s investors.

In summary
As a management team, PMG is 100% committed to ensuring investors achieve their investment goals and believe our strategy, in-house property and funds management team, and investment portfolios will continue to deliver on these goals.

We operate an open-door policy to all our investors and encourage you all to comeand see us or pick up the phone and tell us about your investment objectives. It’s our mission to create value for people in property, through strategic investment and build lasting relationships you can trust. I look forward to hearing from you.

Scott McKenzie
Chief Executive Officer & Director

*Property Managers Limited is licensed under the Financial Markets Conduct Act 2013 to manage Managed Investment Schemes (excluding managed funds) (‘schemes’) which invest in, or own, real property in New Zealand.

I have been reflecting for some time now of my time as a child, when I used to save 50 cents per week through the ASB 1080 Club. Some of you might recall Kashin, the Asian elephant whom ASB gifted to the Auckland Zoo in 1972. Kashin became the key advertising symbol for ASB and it didn’t take long for her to become a star attraction at Auckland Zoo for generations of young New Zealanders. Kashin is a play on the words “cash in”, but it also means “compassionate” in Hindi.

The elephant-shaped moneybox (which ASB has now re-incarnated into a digital moneybox linked to parent’s smartphone banking apps), is an ingenious idea to encourage good savings habits in kids, as an elephant never forgets. It got me thinking that with bank deposit rates so low, why not encourage people of all ages to invest (rather than save) small amounts often, in order to achieve the higher returns that commercial real estate can offer?

We can take note of Stephen Covey’s5 advice to “start with the end in mind”. Well, with the recent announcement by the Government that it will raise the retirement age in 20 years to 67, most of us and certainly our children, in the end, will need either a moneybox of funds to live from or have created a passive income which will replace our salaries when we are no longer able to work. While there are many strategies to get you there (including winning the lottery) - these are the only likely possibilities.

Smart people make calculated investments and experience tells me that the compounded effect of low-risk small investment over time (such as investing in commercial property portfolios), will far outweigh oneoff singularly large investments of a higher risk.

This brings me back to education and why we should be encouraging and teaching our younger generations how to invest in their future. Going forward, PMG will be working on a number of initiatives geared towards assisting Kiwis into generating wealth for themselves and their families and we’ll share our efforts with you.

Next time you sit down with your loved ones, I encourage you to have a conversation around what they are doing towards their financial future.

Daniel Lem

Director & Head of Investment

While we are already one quarter through 2017, I wanted to both reflect on 2016 and share some projections for 2017. In 2016 PMG raised $65 million across three offers, culminating in our largest capital raise of $44 million in December. I will remember 2016 as a year of feeling very humbled by the huge amount of support we received from our investors throughout all three offers. I’d like to personally and sincerely thank our valued investors - some of whom have invested with PMG for 25 years - for their interest in PMG’s portfolios, and for putting their faith in us as property and fund managers. We don’t take that trust lightly and will do everything in our power to ensure you get the most out of your investments with us.

I’d also like to acknowledge our partners and suppliers who helped us achieve so much in 2016. Despite global volatility, last year was a great year for the New Zealand economy. The NZ share market (NZX50 Gross Index) returned 8.8%, bonds (BNZ 090) returned 5.15% (as at Feb 17), term deposits increased 3.5% (one year) to 4.2% (five years) and the IPD Property Index showed 13.9% (total return) for 2016. The cash yield for property trusts were also up with Argosy returning 5.9% (as at Feb 2017), Goodman Property Trust 5.2% (as at Feb 2017) and Property For Industry 4.7% (as at Feb 20171). Our own Pacific Property Fund Limited had an annualised cash return in 2016 of 7.36% ($2.2m of distributions).

Global economic predictions for 2017 paint a similar picture of volatility (although uncertainty has become the new norm in macro-economics). Global bank UBS has identified five main risk areas for 2017:

1) Trumponomics – non-delivery on Trump’s promises.

2) Rising protectionism by a number of western countries.

3) Geopolitics.

4) Populism leading to European disintegration.

5) Withdrawal of central bank support².

Despite this international picture, New Zealand has a strong economic base and the outlook remains strong for business and property. The events to watch that could affect New Zealand’s economy this year are the liquidity of New Zealand banks (as they manage their own balance sheet funding to comply with APRA and Reserve Bank requirements), a possible trade war between China and the US, and any more Eurozone uncertainty. However, as positive net migration continues to occur, with more Kiwis coming home (or not leaving), New Zealand will see ongoing asset price inflation.

We will also see the local commercial property market remaining strong and buoyant. This thinking was recently reconfirmed when the room was completely full at Collier’s commercial auction³ on 9 March 2017. At the auction, assets under $10 million were hotly contested achieving yields between 5.2% and 5.8%. This local and global picture reinforces to me that PMG is on absolutely the right track with diversification as our focus, including diversification within our existing funds, as well as launching new funds for different property categories.

Economist and business professor, John Kay, was recently quoted saying “get rich slowly” and “stay rich, once you are”⁴. Diversification across commercial property is an excellent mechanism to achieve this as part of an investor’s overall investment portfolio approach. Overall, NZ is well placed in the global context. While volatility and uncertainty does offer risk, having a longterm investment strategy based on diversification in commercial property, we believe 2017 will be a positive year for the country, PMG, and our investors.

Scott McKenzie

Chief Executive Officer & Director

In 2012¹ the Government set itself the goal of ensuring 98% of all children, aged between three and five years old, attend a quality early learning centre prior to starting primary school. It committed $80 million over four years to achieve this, which included providing subsidies to early learning centres to ensure their fees were affordable.

However, by the end of 2016 this target of 98% was not reached. In our view, more needs to be done to invest in our future generations. In response to a growing need for more early learning centres, PMG has entered into a partnership with a specialised early learning centre planner and developer to establish quality childcare properties across New Zealand.

PMG Director and Head of Investment, Daniel Lem, says PMG will create a dedicated childcare property fund comprising of multiple centres across New Zealand. “PMG Direct Childcare Fund is part of PMG’s strategy for diversified investment offerings,” says Daniel. “We’re pleased to be able to provide another alternative investment choice for our investors, as well as the opportunity for them to contribute to the education of young New Zealanders - a cause so many of us are very passionate about.” “The Fund is also part of a wider PMG initiative to use the skills that we have, as property professionals, to help tackle issues in the community,” he says.

PMG Direct Childcare Fund will be underpinned by experienced childcare operators on long-term lease contracts, and will provide secure and stable income for investors. Our partners are experts in connecting existing operators with suitable sites for early childhood education, as well as project and development management. Early learning centres reinforce what children are learning at home and in the community. They provide experiences in numeracy, literacy and science, but through the child’s preferences and choices in free play. While time in a loving, secure home is vital to their development, learning in a new environment gives children a chance to make friends, master new skills and learn to trust people outside of their family. “For PMG this is all a part of helping to support the welfare, education and prosperity of New Zealanders in the longer term,” says Daniel.

For further information about PMG Direct Childcare Fund please contact Matt McHardy at our Tauranga office, matt@propertymgr.co.nz.

Matt McHardy

Authorised Financial Advisor

The following article featured in the NZ Herald on the 17th of December. You can see the article online here.

Tauranga-based Property Managers Group has closed its largest combined offer, raising more than $44 million in five weeks across two of its managed investment portfolios, says chief executive Scott McKenzie.

The portfolios are Pacific Property Fund and a new dedicated office managed investment scheme, PMG Direct Office Fund.

The capital raised was three times more than previous offers the company has taken to market, said Mr McKenzie.

"Nearly 30 per cent of the funds raised came from investors who are new to Property Managers Group and who have not invested in any of our investment portfolios previously, while nearly $32.5m was raised from existing investors," he said.

Property Managers Group plans to settle the 11 acquisition properties before Christmas, with three properties added to Pacific Property's existing portfolio, and eight going into the new PMG Direct Office Fund.

Pacific Property will acquire the former State Insurance building at 46 Spring St where it has its Tauranga office, and Stag Park, an industrial logistics hub in Taupo.

The third acquisition is Pacific Property's first acquisition in Whangarei, which is tenanted by the Farmers Trading Company on a new 15-year lease.

Pacific Property director Denis McMahon said Pacific Property's assets offered investors geographical and category diversity, with Stag Park Taupo representing a significant redevelopment opportunity.

"We're thrilled to be bringing three new properties into Pacific Property," he said.

Pacific Property is targeting a gross dividend return of 7.2 per cent per annum for the full financial year to March 31, 2018. The Direct Office Fund is targeting a gross distribution return of 7.5 per cent per annum for the first full year to March 31, 2018.

Mr McKenzie said investors had told the company they liked the fact that it managed all of its properties in-house.

The few months between Property Line issues has been the busiest in history for PMG. Not only did we oversubscribe the $15m July capital raise for Pacific Property Fund a week early, but we are thrilled to have filled our biggest ever capital raise to date - $44m across two offers (read more page four). We’ve also hosted our first series of investor roadshows, opened our Auckland office, and successfully rolled out our new property health and safety management application, Forsite.

And that’s just what’s happening within our control, which segues me to Brexit, President Trump, and most recently the devastating Kaikoura and Wellington earthquakes of 14 November 2016. Whilst investors can factor in planning for major geo-political changes such as Brexit and President Trump, it is difficult to plan for the consequences of natural disasters. And simply avoiding regions or property on the whole is not the answer, as such events have an impact across all markets.

Instead, at PMG we believe in diversifying as a measure to manage risk. This was the strategy behind the launch of Pacific Property in 2014 and now with the launch of PMG Direct Office Fund. By diversifying across property types, tenant types and regions, investors aren’t as exposed as if they had all their funds in one property should the unexpected happen – such as losing a major tenant, or at worst earthquake damage as we have seen in recent years. Furthermore, by pooling investors together we are creating scale with the potential to act as a secondary market – creating greater liquidity.

Finally, as our esteemed roadshow presenters also shared, New Zealand is well insulated from the world’s unrest. We have low inflation, low interest rates, steady growth and a booming tourism sector. It is also well known that property in New Zealand is seen by investors globally as an attractive place to invest– which is in part driving the record breaking home values in regions such as Auckland and Queenstown. The commercial property sector in particular is well poised to leverage the current environment threefold – it is not as prone to the fluctuations of the residential property sector; is well poised to leverage improved business confidence which in turn drives growth and demand for quality premises; and continues to provide sustainable returns to investors seeking better yields than interest rate driven term deposits and global property trusts.

Scott McKenzie
Chief Executive Officer & Director

As one of New Zealand’s most preferred and trusted private property and fund managers, we are thrilled to have recently offered and filled two new investment opportunities to the market. Our latest two offers raised a combined total of $44 million across two investment portfolios that Property Managers Group will manage, including the established Pacific Property Fund Limited and a new dedicated office investment scheme, PMG Direct Office Fund.

The combined raise was the largest offer Property Managers Group has presented to the market in our 24-year history, three times more than previous raises we have taken to market. With these offers we are proud to provide investors the ability to gain access to diversified portfolios with numerous buildings and tenants at relatively low entry points.

The new PMG Direct Office Fund brings together a portfolio of solidly performing office properties largely across the Auckland and Tauranga regions. It offers investors sustainable returns and excellent capital growth potential through proactive management focused on building refurbishment and leasing. The offer was fully subscribed with $28 million of investor capital raised.

With the office market performing so well, particularly in Auckland, it gave us great pleasure to present PMG Direct Office to the market. We are delighted to cater for our investors who have told us they want greater diversification and more sustainable returns. By placing multiple properties, rather than one, into a managed investment scheme which provides greater exposure to more buildings and tenants, our investors achieve greater diversification and improved likelihood of sustainable returns.

Eight properties have initially been acquired by PMG Direct Office Fund, offering diversification both geographically and across 50 tenants. The Fund is targeting a gross distribution return of 7.50% per annum for the first full year to 31 March 2018. PMG intends to introduce further dedicated funds to the market in due course.

Sixteen million new shares in Pacific Property Fund Limited, the largest investment portfolio Property Managers Group manages, were also offered to the market. The funds raised were used to assist with the acquisition of a logistics industrial hub in the central North Island (Stag Park), a CBD retail property in Whangarei leased to Farmers for 15 years, and a mixed-use commercial and retail property in the heart of Tauranga’s CBD.

As with the PMG Direct Office Fund, the assets Pacific Property recently acquired offer investors geographical and category diversity, with Stag Park and the Farmers acquisitions representing significant redevelopment and value-add opportunity.

Since its establishment in 2014, Pacific Property has had a clearly defined strategy of investing in industrial, retail and commercial properties predominantly within the ‘Golden Triangle’ of Auckland, Hamilton and Tauranga. We’re thrilled to be bringing three additional quality properties into Pacific Property with this latest offer, targeting a strong and sustainable gross dividend return of 7.20% per annum for the full financial year to 31 March 2018, and delivering greater liquidity.

Nearly 30 per cent of the funds raised came from investors who are new to Property Managers Group and who have not invested in any of our investment portfolios previously, while nearly $32.5 million was raised from existing investors.

The average investment taken up, as part of the combined offer, in PMG’s Pacific Property was $183,000 per investor.  The average investment taken up in the new PMG Direct Office Fund per investor was $160,000.

Subscription to both PMG Direct Office Fund and Pacific Property are now closed. If you would like to be first to know about future offers, please do not hesitate to contact either Matt McHardy on 07 929 7109 or Mat Harvie on 09 280 3469 , or email info@propertymgr.co.nz.