Landowners Go Into Property Deals

Four Papua New Guinean landowner companies in oil and mineral resource rich provinces have made history by becoming partners in an all-local property investment business in the country.

The companies, Petroleum Resources Kutubu Limited, Petroleum Resources Moran Limited, Petroleum Resources Gobe Limited and Mineral Resources Star Mountains Limited, are also part of a new property investment concept used in the country for the first time when they joined other local firms to buy Pacific Place, a modern prestigious 17-level office complex in Port Moresby's central business district for K40.25 million from the Papua New Guinea Government.

The other two members of the consortium which is called the Pacific Property Trust are the Investment Corporation Fund of Papua New Guinea and the Motor Vehicle Insurance Limited.

Pacific Equities and Investment Limited is the fund manager while Melanesian Trustee Service Limited is the trustee. They are both local companies. While congratulating the unit holders in the trust, Prime Minister Sir Michael Somare said: "I am particularly happy and encouraged to see landowner companies participating in long-term investment, and in this case, investing in Pacific Place, is undoubtedly sound and reassuring for landowners."

The managing director of the fund manager, John Ruimb said listed property trusts in Australia have been quite popular property investment vehicles, hence they have experienced phenomenal growths over the past 10 years. Ruimb said many Papua New Guineans want to invest in large commercial properties in the country. However, there has been an absence of an appropriate vehicle for collective investment where individuals and entities can use to pool together their money to invest.

He said this was the underlying reason why the Pacific Property Trust was established.

He said the objective of the trust is to provide a regular income and the potential for some capital growth over the medium to long-term. Ruimb said Pacific Property Trust is the first of many more new products which his company as the fund manager and fund trustee intends to introduce to the PNG market.

We have a greater vision for Pacific Property Trust which will not be confined to investing in Papua New Guinea properties only but we will also pursue commercial property ownership in the Asia-Pacific region.

Pacific Property Trust will also become Papua New Guinea's flagship for investment in high quality properties in the Asia Pacific region.

"Such international diversification of part of its investment portfolio will serve both as a risk reduction measure and maximisation of returns, where returns are identified as comparatively higher," Ruimb said.