Mercer Unlisted Property Fund: Institutional NZ residential property exposure 

Mercer New Zealand is leveraging our global investment depth and local partnerships to bring an institutional-grade residential property exposure in the New Zealand market to our Unlisted Property Fund (“Fund”). We have appointed New Ground Capital as a new manager to the Fund.

Investments managed by New Ground Capital offer investors a scalable, institutional-quality way to own modern residential assets, with an initial focus on leasing to government and -community housing providers. The strategy pairs inflation-resilient, long-term income with potential residential capital growth.

Institutional portfolios have historically had limited, incidental exposure to quality residential property at scale. That is changing. New Zealand faces a persistent housing undersupply and growing public-sector demand for leased accommodation. We believe the best way to capture the structural benefits of residential property is by design: a targeted allocation managed by an experienced local specialist and integrated within our unlisted property portfolio.

Mercer made an initial commitment to the Fund in December 2025. The Fund was seeded from our existing Mercer Unlisted Property Portfolio, with capital to be drawn over time as attractive opportunities are identified. This will help diversify the Fund’s current exposure and broaden the property opportunity set for our clients.

If fully deployed today, the allocation to New Ground Capital is estimated to represent approximately 26% of the unlisted property portfolio value. The actual proportion may vary over time as the portfolio grows and valuations fluctuate. 

Key reasons to add this exposure to portfolios:

The Fund moves investors from incidental exposure to a purposeful, scaled position in residential assets. Managed by New Ground Capital, a specialist with nearly a decade of New Zealand experience across Build-to-Rent and affordable housing, the strategy gives investors access to a pipeline of opportunities that would be difficult to capture at scale without specialist capability and local relationships.

A core feature of the Fund is stable, inflation-linked income. Properties managed by New Ground Capital are leased under medium- to long-term contracts - typically around five years - to government and community housing providers with strong covenants. Many are backed or funded by government agencies or well-capitalised community housing providers.

While the Fund’s primary objective is to deliver strong risk-adjusted financial outcomes for investors, the investments managed by New Ground Capital also supports positive social outcomes by increasing access to quality, secure housing through working with government and community housing providers. This focus provides a clear point of differentiation versus traditional property strategies.

For most diversified investors the look-through exposure will be modest, but the Fund meaningfully enhances income stability and diversification within unlisted property allocations. By supplying stable long-term rental income and offering participation in residential capital growth across a geographically diversified New Zealand portfolio, it enhances the sector and geographic diversification of the unlisted property portfolio.

Manager selection is central to this strategy. New Ground Capital brings institutional experience, local sourcing relationships with community housing providers and government agencies, and operational capability to deliver projects at scale. Importantly, New Ground Capital’s principals align with investors through an equity commitment to investments. Combined with Mercer governance, this partnership pairs disciplined sourcing and risk management with measurable public-housing outcomes.

This Fund is suitable for investors seeking predominantly diversified unlisted residential exposure with a long-term horizon and limited liquidity. Key risks include property market and valuation risk, tenant covenant and counterparty risk, interest rate and funding cost risk, concentration risk, and the limited liquidity of a closed-ended structure.

Access to the Fund is primarily through Mercer wholesale vehicles and Mercer diversified funds that include unlisted property allocations (for example, our Conservative, Balanced and Growth KiwiSaver and wholesale funds). Speak with your Mercer financial adviser or relationship manager to understand how this exposure could fit within your strategic allocation.

This is a strong example of Mercer delivering a true win-win: an NZ-centric investment built to institutional standards that targets durable income and capital growth while also delivering real-world benefits for New Zealand communities and the local economy. By partnering with New Ground Capital, the Fund pairs disciplined governance and strong local operational capability with locally relevant solutions – seeking commercial return and positive social outcomes in parallel, rather than as a trade-off.