Tauranga-based syndicator Property Managers Group opened an offer yesterday seeking $37.44 million to buy 2 industrial properties in Hamilton & Palmerston North.
They’ll be added to the portfolio of PMG’s diversified, unlisted commercial property fund, Pacific Property Fund Ltd.
It’s the 6th & largest capital-raising for Pacific Property since it was founded in 2013.
The company aims to raise the new investor capital by 7 December to buy 33 Vickery St in Hamilton, tenanted by Alto Packaging Ltd, price $35,478,636; and 31 El Prado Drive in Palmerston North, which is online retailer EziBuy Ltd’s international distribution centre, price $16.55 million.
Including acquisition costs, PMG puts the total cost of the 2 transactions at $59.55 million. Assuming the capital-raising is fully supported, Pacific Property will require $22.11 million of loans from ASB Bank & the Bank of NZ for a 37.1% debt ratio.
Pacific Property is offering investors 36 million shares at $1.04/share and is targeting a gross cash distribution return (net of expenses but before tax) of 7.25c/share for the full financial year to 31 March 2020.
PMG chief executive Scott McKenzie said the acquisitions were in line with Pacific Property’s strategy for ongoing growth & diversification and PMG’s continued confidence in the solidly performing commercial property sector.
“Unlisted commercial property funds have been one of the best performing asset classes in the last 3-5 years compared to 6-month term deposits (3.25%), residential property returns (4.3%) & NZX 50 gross yields (5.2%) over the past 12 months,” Mr McKenzie said.
Completion of these 2 purchases will take Pacific Property’s portfolio to 12, valued at a total $183 million, with 76 tenants on a weighted average lease term of 6.4 years.
Property Managers Group
Attribution: Company release, product disclosure statement.