Tauranga-based Property Managers Group has announced two capital offers to raise a minimum of $44 million across two investment property portfolios.
The new capital raises come on the back of its oversubscribed $15m offer in August, which in part, funded the Tui Products building's planned expansion.
Property Managers chief executive Scott McKenzie confirmed that a significant proportion of the investment will be directed into Tauranga property. The rest will be committed elsewhere in the central region and in Auckland office space.
"We very much see an upside in terms of commercial property," said Mr McKenzie.
The offers will be split between Property Managers' established Pacific Property Fund, and PMG Direct Office Fund which is a new, dedicated office managed investment scheme pitched at retail investors.
The Pacific Property offering of $16m in new shares will fund acquiring the former State Insurance building at 46 Spring St where the company has its Tauranga office, and Stagg Park, an industrial logistics hub in Taupo.
The third acquisition will be a large retail building in a regional location, details of which cannot be disclosed because of commercial sensitivities. The offer is targeting a gross dividend return of 7.2 per cent per annum for the financial year to March 31, 2018.
The other offer is for new entity PMG Direct Office Fund, which is raising a minimum of $28m and maximum of $29m to acquire three offices in Tauranga, worth some $8.5m, and five properties in Auckland. The new fund brings together a number of single-property investments managed by Property Managers Group, with a total of 50 tenants.
The new capital raise is for up to 29m ordinary units to be issued at $1 per unit in initial parcels of 10,000 and then 5000 units. PMG 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.
The companies have contracts on all of the proposed acquisitions under the two offers.
"Over the past few years, the office market, particularly in Auckland, has been performing well with low vacancies and increasing rental returns," said Mr McKenzie.
"Our investors have told us they want greater diversification and more sustainable returns. This is achieved by placing multiple properties, rather than one, into a managed investment scheme which provides greater exposure to more buildings and tenants," he said.
The strategy was aimed at shifting away from the traditional, single-building ownership structures where investor returns are more reliant on the performance and retention of individual buildings and tenants, he said.
The combined raise is the largest offer Property Managers has presented in its 24-year history.
Pacific Property director Denis McMahon said the assets Pacific Property intends to acquire offered investors geographical and category diversity, with Stag Park representing a significant redevelopment 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," said Mr McMahon.
The offer formally closes on December 2.
Property Managers Group
-Formed in 1992.
-Has brought to market 28 separate investing offerings.
-Has $200m of property and funds under management.