Kelston buy boosts Pacific Property portfolio

Pacific Property's purchase of Kelston Shopping Centre will take the total number of properties it owns to nine. Photo / Supplied

Pacific Property Fund Limited, managed by Property Managers Group (PMG), has announced an offer that could result in the private property investment portfolio becoming one of the largest in New Zealand, not including private trusts.

Pacific Property is issuing 24 million shares under the offer at an issue price of $1.02 per share, with a minimum investment of 20,000 shares and parcels of 10,000 shares thereafter.

The funds raised, alongside bank borrowings, will be used to acquire Kelston Shopping Centre in West Auckland. The target cash distribution return is 7.2 cents per share for the full year to March 31, 2019. Pacific Property now has a total asset value of $74.3m under management and this latest offer and acquisition will increase its value to $114.6m.

The purchase of Kelston Shopping Centre will take the total number of properties Pacific Property owns to nine, which will include a total of 75 tenants (with a 97 per cent occupancy rate) on a weighted average lease term (WALT) of 7.53 years.

Pacific Property director Denis McMahon says it was PMG's strategy from the outset to grow into the largest unlisted diversified property portfolio in New Zealand. "An investment vehicle of this size and diversification provides our investors with strong, sustainable returns over time, growth in value over time, and improved liquidity and we are proud to be delivering on our promises," he says.

Pacific Property is a diversified investment portfolio of industrial, retail and office property investments primarily in Whangarei, Auckland, Hamilton, Tauranga and Taupo.

Property Managers Group chief executive Scott McKenzie says PMG has focused on building Pacific Property, into a highly diversified investment portfolio, which offers greater autonomy to anticipate market changes and adapt quickly. "Having multiple tenants and multiple properties in an investment portfolio means total income is less likely to be as affected by the loss of a single tenant or an unforeseen event. This results in more reliable and sustainable returns, attracting more investors to invest, which results in providing greater liquidity for the underlying shares.

"We also maintain a conservative level of bank gearing compared to other peers in the market. This ensures the portfolio is well-positioned to weather any economic clouds that may roll across the horizon and enable us to better look after our investors interests," says McKenzie.