Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Goodman Property seeks $80M to help fund Highbrook buy-out

Goodman Property seeks $80M to help fund Highbrook buy-out

Nov. 13 (BusinessDesk) - Goodman Property Trust is seeking $80 million in new equity from institutional and retail shareholders to buy the 50 percent it doesn't already own of the Auckland business park, Highbrook, in a $186.6 million transaction involving cash, trust units and deferred payment elements.

GMT shares were unchanged at $1.06 in trading on the NZX this morning following the announcement, which coincided with declaration of an improved first-half profit of $31.6 million, up 9.6 percent on the same period last year.

Distributable earnings before tax came to $41 million, equivalent to 4.07 cents per unit, while the valuation of the trust's existing portfolio was stable at $1.642 billion.

The Highbrook transaction will see the property trust buy the 25 percent stakes each held by investors Goodman Group and Fisher, and the 25 percent share of HBPL Properties owned by Fisher for a total of $186.6 million, valuing the total net assets at $447.9 million. Fisher is an investment vehicle associated with the estate of Woolf Fisher.

Total consideration for Goodman equates to $74.7 million, including deferred payments, and for Fisher the deal is valued at $112 million, reflecting its holding in HBPL Properties.

“The scale and quality of Highbrook Business Park means that it is already a significant contributor to the trust’s financial performance," said Keith Smith, chairman and independent director of Goodman (NZ), which manages GMT. "Full ownership and the progression of the development programme will ensure that Highbrook becomes one of the principal drivers of GMT’s investment returns.”

The business park in the Auckland distribution and manufacturing hub of East Tamaki already houses operations for a range of major businesses, including OfficeMax, Courier Post, Vodafone, Steel and Tube, and IBM, and has room for further development.

The proposed arrangements see Goodman Group paid in GMT units for its 25 percent of Highbrook Development Ltd, issued at $1 a unit, with half to be issued on completion of the transaction and the remainder at December 2015. A further two million units will be issued as compensation for the deferred payment arrangement, on the same basis of half at transaction settlement and half deferred.

Fisher will be paid half cash, half units for its 25 percent holdings in HDL and HDPL Properties, issued at $1 per unit and with a minimum 12 month holding period. The units issued in relation to the Highbrook purchase won't be eligible for distributions paid in December.

Meanwhile, the trust will seek $60 million through an institutional placement at $1.015 cents per unit and a further $20 million, capped at $30 million, from New Zealand-resident unitholders, who will be limited to applications of $15,000 each. These units will be priced at the lower of $1 and the average closing price of united between Dec. 12 and 18.

Neither equity-raising action is conditional on the Highbrook acquisitions gaining unitholder approval at an extraordinary meeting of unitholders on Dec.7.

GMT is arguing the Highbrook acquisition gives the trust "expanded development capacity at a point in the property cycle where development activity and property values are improving" and "a favourable consideration structure, with an element of deferral that aims to maintain the trust’s distributable earnings profile on a weighted average issued unit basis."

Both Goodman Group and Fisher would be reinvesting back into GMT, maintaining strong alignment through their respective equity investments and strengthening its balance sheet, while there could be
"operational savings as a result of simplified ownership structures."

The trust would also gain "increased scale and liquidity, with GMT’s market capitalisation expected to increase to $1.3 billion as a result of the acquisitions and the equity funding initiatives."

GMT directors described the half-year result was "sound", with some 35,900 square metres of new development projects begun during the period at a total cost of $61.2 million, with an expected weighted yield on cost of 8.8% once completed and fully income producing.

Some 9 percent of its total portfolio has been secured on new or revised terms, with an average occupancy rate of 96 percent and a weighted average lease term of 5.4 years and $28.4 million reinvested into the business from sale proceeds.

Net tangible assets of 93.1 cents per unit were up slightly from 92.9 cents per unit at 31 March 2012.

"The current operating environment with only modest economic growth is consistent with the board’s earlier assumptions and pre-tax distributable earnings, on a weighted average issued unit basis, of around 8.2 cents per unit are expected for the full year," GMT's statement to the NZX said. "The board intends to maintain GMT’s tax paid distribution at 6.25 cents per unit or around 80% of distributable earnings after tax."

Record date for the second quarter distribution is Nov. 28, payable Dec. 20, and will comprise a cash component of 1.5625 cents per unit, with imputation credits with 0.1693 cents per unit attached. The distribution reinvestment plan remains suspended.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>

ALSO:

Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>

ALSO:

Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>

ALSO:

Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>

ALSO:

Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>

ALSO:

Earlier:

Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>

ALSO:

'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>

ALSO:

Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news