Unlisted commercial real estate manager, PMG, is looking to raise up to $50 million to acquire a new property for its Generation Fund portfolio.
In documents lodged last week, PMG says the retail capital-raising targets a minimum $30 million to fund the purchase of a central Hastings commercial building tenanted by Farmers.
Currently, the Generation Fund holds five assets dotted around the country in Wellington, Tauranga, Christchurch and Hamilton valued at about $175 million.
PMG chief, Scott McKenzie, and chair, Denis McMahon, note in a letter to investors that: “This offer will enhance the scale and robustness of the Fund, which has already shown good resilience since establishment in 2020.
“Following a successful offer and the acquisition of this property, the Property Portfolio will consist of six properties across five regions valued at over $200 million, with an estimated total of 66 tenants.”
The Hastings deal, set to complete at the end of March, will set PMG back about $27 million with any extra funds raised to be used as dry powder “until it is ready to make such Property Investments, or reduce bank borrowings, to provide the Fund flexibility for future opportunities to acquire additional Property Investments efficiently”, the offer document says.
According to the product disclosure statement, any future Generation Fund allocations are likely to be via associated PMG vehicles “but such investments are currently not available”.
Open from March 2 until March 30, the PMG offer – available direct and via the InvestNow platform – targets a gross annual distribution of over 5.2 per cent.
However, the PMG fund has limited liquidity options with no official redemption channels yet available. Under the prospectus terms, the manager could open up for redemptions once the total Generation fund value reaches $100 million.
“While the Fund has exceeded $100 million worth of Units on issue, the Manager has determined not to permit redemptions immediately, and there is no time frame established for permitting redemptions,” the offer document says.
As well as the Generation Fund, launched in 2021 as a portfolio investment entity, PMG runs four other closed end specialist commercial property funds.
Established in 1992, PMG was granted a managed investment scheme licence by the Financial Markets Authority in 2019.