PMG Commercial Fund

I’m looking into commercial property funds to provide a reliable income source for very little time input with a young family.

My wife and I have consolidated from two rental properties down to one in order to get a bigger family home. With the current returns and regulations and the fact we are a single income family for the next few years, don’t see us rushing into buying any more residential rentals in the near future.

Buying individual commercial properties ourselves I see as too much of a risk with vacancies so hence property funds fit the bill.

What’s everyone’s thoughts and experiences with unlisted property funds? Specifically looking at PMG Pacific Property Funds

I'm in a few such funds, although not PMG. Some like mackersy properties Spark building in wellington are excellent. A couple have been mediocre. But The listed property trusts might be worth a look at. Particularly with top tax rate now at 39%. against 28% max for lpts, which are PIES. But you're on the right track looking beyond residential as an investment. Lpts can be accumulated in small doses. Syndicates from 50k usually.

Have a look through some of the headings on this title page.
https://www.google.com/search?q=nz+p...hrome&ie=UTF-8

Or you might find something interesting on syndicate exchange.

https://www.syndex.exchange/?gclid=C...IaAgC_EALw_wcB

Best wishes

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Originally Posted by fungus pudding

The listed property trusts might be worth a look at. Particularly with top tax rate now at 39%. against 28% max for lpts, which are PIES. But you're on the right track looking beyond residential as an investment. Lpts can be accumulated in small doses.

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Thing I can’t understand about listed property trusts is I’ve got a no hassle index fund in the NZX50 Superlife/Smartshares fund just ticks along long term averaging 9-10% a year or so.

To pick an individual stock or other investment, due to the higher risk of less diversification I’d like to earn 11-12% or so. The listed trusts on the NZX seem to return less on average than the index for more perceived risk. Same with residential property I’d expect a return factoring in 50-60% leaverage of 12%+ otherwise why bother just plonk it in the index fund

Unlisted trusts being less liquid and less analysts poring over it thinking the buy/sell spread would be more, likely to pick up a higher yield investment.

What do you think Fungus Pudding?

Hi epower
There is a long thread on the NZX section on property trusts. Not sure if you´ve read it but here it is https://www.sharetrader.co.nz/showth...-Trusts/page52

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Originally Posted by epower

Thing I can’t understand about listed property trusts is I’ve got a no hassle index fund in the NZX50 Superlife/Smartshares fund just ticks along long term averaging 9-10% a year or so.

To pick an individual stock or other investment, due to the higher risk of less diversification I’d like to earn 11-12% or so. The listed trusts on the NZX seem to return less on average than the index for more perceived risk. Same with residential property I’d expect a return factoring in 50-60% leaverage of 12%+ otherwise why bother just plonk it in the index fund

Unlisted trusts being less liquid and less analysts poring over it thinking the buy/sell spread would be more, likely to pick up a higher yield investment.

What do you think Fungus Pudding?

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Sorry but I'm not much help. I know nothing whatsoever about the share market. For me it's all too risky apart from when it's bricks and mortar backed. I do know and understand commercial real estate. My philosophy is to keep stacking income. I don't trade - I collect. Although my initial investing was through a few flats, but soon got out of that area and scrapped my way into commercial. If you have a similar philosophy (stacking up income, through collecting investments and adding more) you eventually get to the stage where liquidity hardly matters. Take them to the grave with you. And don't overlook the advantage of the PIE structure. It all depends on your income level of course, but if it's not a benefit to you now, keep stacking it up - and it soon will be.
Further on taking your investments to the grave - I'm more than happy to bequeath my wordly goods as income rather than lump sums of cash. Hopefully the nit-wits among my beneficaries (we've all got some) will soon get hooked on the income. I'd spin myself clean out of my grave if I though I'd just shouted a bunch of my rellies and mates a brand new car and similar feel-good junk each

When looking at any investment, I prefer to look with my eyes. That is if you're talking bricks and mortar, you really need to know the market. Start asking real estate agents how the "commercial property" market is doing. Because from my basic observation, it does not look too great. Where I am in Christchurch, I don't think there's ever been a worse time seeing too many vacancies and places going up for sale. While this may indicate a good time to buy.... i'm not betting anytime soon the 'retail / business' market will return - meaning these commercial buildings could stay empty for a very long time.

Just read the articles of how much of the corporate businesses have "adapted to" COVID lockdowns and their workers no longer need to drive to work as they can do their work at HOME. When businesses have changed their ways, they're not easily going to change back. Again, this is just my basic observation each time I drive around town seeing one commercial building up for lease after another.