The Bethlehem Town Centre could soon be in the hands of PMG Funds - a company founded in Tauranga - which said the purchase aligned with its game plan to buy quality commercial properties.
PMG manages five unlisted funds with commercial property assets worth more than $750 million and was looking for Bay of Plenty and New Zealand investors to buy into the Bethlehem Town Centre project through its Generation Fund.
The retail property, which spans 21,006 sq m and was valued at $94.8m, has 54 tenants including Kmart, Countdown, BP, Smiths City and Chemist Warehouse.
PMG chairman Denis McMahon said as long-term investors they were looking to acquire assets that would stand the test of time.
Location, build quality, lease profile and ongoing attractiveness to quality tenants were vital characteristics, he said.
''Bethlehem Town Centre satisfies all those criteria."
PMG chief executive and director Scott McKenzie said the acquisition would allow Bay of Plenty residents the opportunity to invest in their own backyard.
''We unconditionally contracted to buy it. We haven't taken ownership or possession of the centre yet but we expect that will happen at the end of July.'
''So essentially we have committed to purchase it and in the interim, we will be doing a capital raising process for one of our funds, PMG Generation Fund, to raise sufficient capital alongside some bank funding to acquire the centre at the end of July.''
McKenzie said Bethlehem Town Centre was a high quality and well-known property at the heart of one of Tauranga's fastest-growing suburbs.
"New Zealanders appreciate the security of land, bricks and mortar, however growing regulatory and tax headwinds for the residential property market is now making commercial property a more sought-after investment option.
"Historically low interest and term deposit rates mean investors are actively looking elsewhere for compelling returns and post-Covid, the commercial property market is stronger than ever, providing a source of secure and steady income."
Tauranga Chamber of Commerce chief executive Matt Cowley said Tauranga was spoilt for choice as the suburban shopping centres had become community focal points to socialise and recreate.
''They are also very handy for people who are unable to travel into the main city for essential supplies. They are often the most convenient option. Many shopping trips happen after people have picked up kids from school.
''They are also convenient for shift workers and people who rely on buses as their transport.''
Cowley said these centres enabled people to shop for essentials during the lockdowns.
''Their role continues in the recovery as people feel strongly connected with their local shopping precinct, particularly as our long-term population trends continue to grow.''
Priority One chief executive Nigel Tutt said it was great to see PMG take hold of the Bethlehem Town Centre.
''They're a standout local investor. Vibrant town centres are part of the settlement plan for the Western Bay, so they're really important for us to be able to have people living, working and shopping in close proximity.''
Who is PMG?
* PMG is one of New Zealand's largest unlisted commercial property funds managers and was founded in the Bay of Plenty in 1992.
* Its founder, Denis McMahon is still involved as chairperson of the company today.
* It now manages five unlisted funds with commercial property assets worth over $750m.
* Applications to acquire units through its PMG Generation Fund's must be received no later than 5pm on July 29, 2021 [or earlier if fully subscribed]. This offer is not available to investors outside of New Zealand.