December 2022 - Bay of Plenty Business News

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30 BAY OF PLENTY BUSINESS NEWS December 2022 PROPERTY INVESTMENT FUNDS Bethlehem town centre, acquired by PMG Funds. Investing in your future PMG Funds has an enviable 30-year track record of supporting investors through economic cycles. The Tauranga-headquartered business has grown from a small group of investors’ money in 1992 to a portfolio of 40 properties managed through five investment funds valued at over $900 million. Chief Executive Officer Scott McKenzie, who recently celebrated 10-years at the helm of PMG, shares his thoughts on keeping calm through times of economic turbulence and what opportunities exist for astute investors. The road ahead From a geopolitical and economic perspective, the road ahead is more unclear than ever. We don’t know what’s around the corner – but it’s likely to be a bumpy ride. Over the next year, rising inflation, high interest rates and issues with supply will reduce discretionary incomes to levels well below what we’re used to. This will add a further sense of jeopardy and complexity to investors’ decision making and will call for cool heads. The economy is propelled in cycles, which means the market naturally rises and falls. The speed with which it does this may change, but ultimately it keeps moving forward. By having a clear and well-advised investment strategy and maintaining a long-term investment horizon with a focus on regular cashflow, these short-term market movements should be nothing to fear. Focus on getting the most out of what you have At PMG, we’re big believers in controlling what we can control. Careful stewardship and smart strategy allow us to keep building scale and income resilience irrespective of the economic climate. And I think this guiding philosophy is sound whether you’re managing $900 million of assets or a handful of investments. Over the last year we’ve focused on ensuring SCOTT MCKENZIE. Chief Executive Officer, PMG each of our funds is well-positioned, through decreasing levels of debt, to take advantage of opportunities to grow their portfolios that may arise. In uncertain times, it’s important to have the agility to take proactive steps and not remain passive. Equally, our fund managers talk about increasing exposure to defensive income resilient properties, sectors or companies that are positioned to survive and thrive through difficult periods, for example through uninterrupted demand or Government backing. Our long-term view on wealth creation is underpinned by risk management through diversification. Diversification can be achieved through geography and/or exposure to multiple sectors – and it’s a philosophy that we apply to all our Funds. Don’t invest it all at once This probably sounds a little counter-intuitive coming from an investment fund manager, but liquidity is an essential component of successful investment, allowing you to react swiftly to better buying opportunities as they arise. Successful investors often say, you make your money when you buy. With market volatility, what that looks like in real terms is acquiring assets that have the potential for higher returns later down the track. This could be a property that has some vacancy and is currently undervalued but well positioned to achieve long-term market value, or one that needs development, but the cost and programme variables of carrying out that development has increased risk. Whilst no one can pick the bottom of a market, buying at the right time at good value means potentially enhancing returns when markets recover again. Consider the bigger picture Success is very rarely an overnight phenomenon and there are no shortcuts for investments, so make sure you do your own research and seek input from qualified people before picking your investment path. At PMG, we don’t view all opportunities purely through the prism of growing wealth. Rather we acknowledge the need to consider the impact on the planet and our communities. This year we published our Sustainability Report – a first for the unlisted managed funds sector in New Zealand. Just as we have led the charge in establishing the property funds management industry over this last decade, we also want to play a leadership role in encouraging the sector to actively respond to the need for action around building environmental performance. We’re equally passionate about improving financial literacy. It’s unacceptable that New Zealand is below the OECD average in this regard, so we continue to support this through growing financial literacy for our young people through Life Education Trust’s SMART$. With investment, it’s important to consider the bigger picture – not just for us but for the legacy we leave for our future generations. For more information on PMG, visit pmgfunds.co.nz/invest. The information in this article is of a general nature and was current as at 21 November 2022. It is not intended to be regulated financial advice for the purpose of the Financial Markets Conduct Act 2013, and does not take your individual circumstances and financial situation into account. PMG does not provide financial advice. Please seek advice from a licenced financial advice provider before making any investment decisions. A solid past, a strong future. Since 1992, our proven success through multiple economic cycles has made PMG one of New Zealand's most established licensed unlisted property funds management companies. Find out how PMG can support your financial future at pmgfunds.co.nz 07 578 3494 info@pmgfunds.co.nz
December 2022 BAY OF PLENTY BUSINESS NEWS 31 RESIDENTIAL REAL ESTATE Where is the real estate industry headed in 2023? 2023 marks an interesting point in the New Zealand real estate market cycle, especially compared to the previous decade. According to Property Brokers’ regional manager, Simon Short, “We have experienced a bull market of sorts over an extended period where demand from buyers has simply outstretched the supply of listings. “Prices across the real estate market have continued to increase quarter on quarter, year on year.” He points out that off the back of Covid-19, where government assistance and financial aid were thrust into the economy, we now, like the rest of the world, find ourselves in an ‘over-inflated’ state. “With interest rates now elevating, as expected, to offset inflation, I sense, like many, next year will be a year of further pricing correction and calibration.” Simon has identified a maturity amongst sellers currently looking to sell (and leading into 2023) – they understand 2021 prices are no longer likely and therefore expect values to come back somewhat from where they have been. He believes interest rates will have the largest bearing on buyer confidence – affordability is now a significant factor, with capital gains no longer as prevalent. “There will be an increase in stock levels in 2023 as more homeowners come off fixedterm rates and affordability becomes a factor; For some, selling may be their only option. “Average days to sale are extending, so we have existing stock and new stock all congesting the market at once. “A softening of property prices is expected. “On the other hand, buyers who have strong equity and are cash-ready will be in a strong position to negotiate, and choice in the market will be plentiful”, he predicts Property Brokers 2023 outlook Property Brokers has grown rapidly from humble provincial beginnings to now be New Zealand’s largest, fastest-growing regional real estate brand. They list and sell more provincial property, be it residential, rural, lifestyle, commercial or industrial, than any other brand across heartland New Zealand and look after the largest provincial Property Management rent roll. “Our growth has never been about strategy. Rather it has been about a philosophy: “If it feels right and the people who join us share common business values, then we will make it happen.” SIMON SHORT, Regional Manager, Property Brokers Our growth has never been about strategy. Rather it has been about a philosophy: “If it feels right and the people who join us share common business values, then we will make it happen.” The business is in a strong position to continue expanding when and if the opportunity presents itself. “We are receiving frequent requests from real estate business owners and independent agents who identify with our family-focused, well-resourced business model. “We are an ambitious and uniquely Kiwi business, with more than 900 people from the top of the North Island to the bottom of the South. We connect heartland New Zealanders to one another simply by being in more than 90 locations. Anticipated Bay of Plenty trends in 2023 Property Brokers now has offices across the Bay of Plenty in Whakatane, Rotorua, Te Puke, Papamoa, Tauranga, Tauriko, and Te Puna. The company has established seven offices across the Bay of Plenty region in the last three-and-a-half years. Growth in all facets of business is strong. “We have great people who care about adding as much value as possible for our clients. “We are all part of the local community – schooling, sports clubs, charities and fundraising organisations – you name it, we’re into it. We do what we can when we can to give back and provide support. “Our number one objective is giving all Bay of Plenty property owners the best service we have to offer.” Simon believes there is a real awareness of Property Brokers across the Bay of Plenty now. “We envisage that will continue as more people come to appreciate the strength we offer right across the nation. “Because we are not franchised, our emphasis is always on connection and adding as much value as possible to benefit those around us. Reflecting on 2022 “It’s certainly been a year of continued growth for us. We are proud of what the team has achieved in 2022”. Staff numbers have grown dramatically, and Simon envisages that will continue in 2023. “More agents are connecting with our business – they are impressed by the level of support and resource we offer our team,” he says. Each Property Brokers agent, administrator, personal assistant, property manager, tradesperson, manager, or cadet – anyone affiliated with the Property Brokers Group – is adding value to their community daily. “It’s been hugely rewarding for me, and the team around me, to see that what we are doing really matters. “We are always looking ahead and asking what more we can do to continue the Property Brokers success story.” REINZ
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December 2022 - Bay of Plenty Business News

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