PMG Funds has launched its first capital raise of 2023, seeking further investment in its flagship Pacific Property Fund Limited.

The fund has 23 properties diversified by location and sub-sector but with a strong weighting towards the industrial market, has a 99% occupancy rate and a weighted average lease term (WALT) of 5.7 years. Since PMG launched it in 2014, it has provided $65million in returns back to investors at a total annual return rate of 8.25%.

PMG Funds chief executive, Scott McKenzie, says the timing of the raise reflects the company’s confidence in the long-term health of New Zealand’s property sector as a sustainable source of income for investors, despite current headwinds.

“One noticeable impact of the current economic environment has been a global softening of values across all asset sectors – and commercial property has not been immune to this.”

“This provides an opportunity for investors to join or increase their stake in a quality property portfolio at an attractive price point in anticipation of property values rebounding through the next economic cycle.”

The capital raise is somewhat unusual for PMG in that it will not facilitate the immediate acquisition of new properties. Rather, in the immediate term it will reduce debt gearing and enable a number of value-add enhancements to properties within the existing portfolio to meet evolving tenant needs.

McKenzie says this will support cashflow resilience from the existing portfolio’s rental income and ensure the fund retains the agility to respond to acquisition opportunities as they emerge through the year.