Property funds manager PMG Property Funds Management Limited (PMG) has launched an Offer for the public to invest in PMG
Direct Childcare Fund – a category-specific commercial property investment fund, offering a gross cash distribution
return of 6.50%[1] per annum, paid monthly.
PMG Direct Childcare Fund is one of five unlisted commercial property funds managed by the 28-year-old manager. Since
the Fund’s inception it has provided consistent monthly returns of 6.5% per annum to investors, while PMG’s other four
funds have delivered between 5.5% and 7%[2] returns over the last six years.
PMG Chief Executive Officer Scott McKenzie says continuing to achieve these returns has been a direct result of PMG’s
deliberate strategy to achieve income resilience through growing scale and diversification of properties and tenants in
PMG managed funds over the last six years.
“This strategy, our conservative approach to debt, and experience over 28 years of multiple economic cycles has meant
that not only could we support our tenants through March and April’s lockdown, but also continue to provide regular and
reliable returns to our investors, which are higher in comparison to other asset classes such as cash, bonds and term
deposits[3],” says McKenzie.
“With interests rates likely to be lower for longer, and talk of negative interest rates, we are receiving a huge amount
of enquiry from investors, in our funds.
Despite the COVID-19 economic conditions, PMG has continued to grow resilience across its funds this year through
strategic divestment, recycling of capital and the acquisition of quality commercial properties, geared to prevail
through economic cycles.
Following the successful PMG Direct Childcare Fund Offer and acquisition of the three additional early childhood
education centres, PMG will have overseen eight commercial property transactions valued at over $150 million this year
across its five funds. The manager has also completed two successful capital raise offers in PMG Generation Fund, which
was during the March lockdown, and the second in June for PMG Direct Office Fund, raising $37.76 million from investors.
“We believe this is the most commercial property transactions undertaken by an unlisted New Zealand property funds
manager in the 2020 year to date, and we’re thrilled we have been able to continue delivering on our promises to those
owners,” says McKenzie.
“As long-term investors in property, we do not try to pick the highs and lows of economic cycles. We look for the right
properties, in the right locations, with the right tenants for the right prices always.
“This approach has stood us in good stead,” he says.
Funds raised during the current Offer in PMG Direct Childcare Fund, together with bank debt, will see the Fund acquire
two premium childcare centres in Auckland and one premium centre in Gulf Harbour on the Hibiscus Coast, due to be
completed in January 2021.
The centres in the Fund are leased to highly experienced childcare operators on long leases (averaging 14.2 years), in a
stable Government-funded sector.
PMG is offering between 12 million units ($12.6 million) and 13.5 million units ($14,175,000) in PMG Direct Childcare
Fund at an issue price of $1.05 per unit. Investors must make a minimum investment of 20,000 units and in additional
increments of 10,000 units thereafter.
Following the successful Offer and acquisitions, the three centres will join six existing childcare properties, which
include three recently built and fully operational centres, and two completed centres opening in September.
Upon successful completion of the Offer and acquisitions, the total value of the portfolio will be $45.66 million and
own nine quality, early learning properties across New Zealand.
The Offer is open from Tuesday 29 September 2020. Applications to acquire units in the Fund must be received no later
than 5.00pm on Thursday 29 October 2020. Those interested in this Offer can download a copy of the Product Disclosure
Statement by visiting www.pmgfunds.co.nz.
[1] The projected annualised gross cash distribution return from 1 November 2020 is 6.825 cents per unit on a unit issue
price of $1.05 per unit. The issue price is primarily based on independent valuations and is subject to change.
[2]Based on historical performance of the funds. Please refer to pmgfunds.co.nz for current metrics and more information.
Prospective investors are recommended to seek professional advice from an Authorised Financial Advisor who takes into
account their personal circumstances.
[3] https://www.interest.co.nz/saving/term-deposits-1-to-5-years as at 15 September 2020