MGP buys North Shore property for $21.9 million

MGP buys North Shore property for $21.9 million

3 September 2004

MGP is pleased to announce the purchase of a high quality office property on Auckland’s North Shore for $21.9 million with Macquarie Goodman Industrial Trust (MGI).

Under their co-ownership agreement, MGP and MGI have each bought a 50 per cent stake in the HSBC Centre in Albany. The value of MGP’s share of the investment is approximately $11.0 million, which will be funded by debt.

The manager of MGP, Macquarie Goodman (NZ) Limited (“MGNZ”), said the acquisition of HSBC Centre was in line with its strategy of owning well located, good quality suburban office assets. “This property is strategically located in the rapidly growing Albany area where commercial and industrial property is in demand,” MGNZ’s chief executive John Dakin said.

Total net rental income for HSBC Centre is $1.9 million per annum, resulting in a yield of 9 per cent. It comprises three levels of office space with 192 car parking spaces and was completed in 2002. Key customers include HSBC and Solution 6.

The property has a net lettable area of 5,850 square metres. The vendor has provided a rental guarantee for two years over 1,000 square metres of vacant office and storage space. With this rental guarantee in place, the property has a weighted average lease term of 5.4 years.

Auckland Regional Council’s (ARC) latest Regional Growth Forum said in the five years to 2001, business-zoned vacant land had almost halved on the North Shore from 402 hectares to 211 hectares - a 48 per cent drop. At this rate, total land capacity for business use had an estimated four years before land capacity was exhausted.

Mr Dakin said the Albany area was expected to improve with regard to demand following the ongoing development of the Albany Centre which already includes a major sports stadium, university, substantial retail amenities and a developing office market. HSBC Centre is also located directly across from the proposed Westfield shopping centre and has easy access to the motorway network.

The determination of whether the purchase is conditional on Overseas Investment Commission (OIC) approval is subject to North Shore City Council confirming that the designation of adjoining land as reserve has been removed.
A valuation report has been prepared for HSBC Centre and the independent directors of MGNZ (the manager of MGP) have certified that they have reviewed the valuation report and resolved and certified that in their opinion the transaction is on arm's length commercial terms, and falls within MGP's investment policies.

Unitholders may obtain a copy of the valuation report and independent directors' certification free of charge from MGNZ. The directors of MGP’s manager consider the proposed transaction to purchase HSBC Centre to be in the best interests of MGP’s Unitholders.

Overview of Macquarie Goodman Property Trust

Macquarie Goodman Property Trust (“MGP”) owns 18 properties including warehouse and distribution centres, industrial estates, and business and office parks in New Zealand. The portfolio is split in ownership between two listed trusts, namely MGP, and Macquarie Goodman Industrial Trust (MGI) which is listed on the Australian Stock Exchange.

The combined assets of MGP and MGI total $454 million, of which MGP owns $233 million.

Below is a list of the properties:

Auckland HSBC Centre, Albany Nestle Building, Wiri Millennium Centre, Greenlane IBM Centre, Auckland BTI House, Newmarket Vector House, Newmarket EDS Building, Mt Wellington Windsor Court, Parnell Ricoh Building, Parnell Kodak Building, Parnell Auckland Distribution Centre, Wiri The Gate Industry Park, Penrose Penrose Industrial Estate, Penrose Central Park Corporate Centre, Greenlane HP House, Auckland Savill Link, Otahuhu Fletcher Site, Penrose

Wellington Panasonic House, Wellington

In line with MGP’s strategy, two of its non-core assets have recently been sold including Unisys House in Wellington for $44 million and an unconditional agreement for South City Shopping Centre in Christchurch for $40 million.

For further information please visit the Macquarie Goodman website on www.macquariegoodman.co.nz

ENDS

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