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

 

Goodman opts for underwritten $150m placement

Goodman opts for underwritten $150m placement to raise capital


By Jenny Ruth

Sept. 18 (BusinessDesk) - Goodman Property Trust's manager says it will raise up to $175 million from a $150 million placement to institutions and up to $25 million in a retail offer to existing unitholders.

The institutional placement is underwritten by Jarden Partners and UBS New Zealand and the new shares in both issues will be sold at $2.10, a discount to yesterday's $2.195 closing price. Trading in the units is halted for the placement to occur.

There is no apparent urgency for the funds since the manager says in a statement that the new equity will provide "additional balance sheet capacity that will be used to fund current commitments and future investment and development opportunities in the supply-constrained Auckland industrial market."

Goodman's largest unitholder and owner of the manager, Australia-based Goodman Group, says it will participate in the placement for its pro-rata equivalent. It has a 21.59 percent stake.

The retail offer allows New Zealand-resident unitholders to subscribe for up to $50,000 of new units each. Goodman is targeting $15 million but will accept up to $10 million of oversubscriptions "at the manager's discretion."

Goodman says the equity raising is structured to be "fair to all existing unitholders with the issue price being the same as the placement."

Retail investor group, the New Zealand Shareholders' Association, has been a vocal critic of the use of placements unless there's an urgent need to raise capital.

Chair of the manager, Keith Smith, says the placement will reduce the trust's committed gearing to just 21.2 percent. That's down from 23.7 percent at March 31 and below the board's preferred range of 25-35 percent.

Goodman also announced plans to spend $74.9 million on five new industrial developments in Auckland on a build-to-lease basis. They are expected to generate $4.6 million in annual rental income once fully leased and income-producing.

The trust already has $140.7 million of other projects currently underway.

The manager's chief executive, John Dakin, says the trust's portfolio is fully let and the new projects will provide much-needed new supply.

"Historically low vacancy levels and a lack of appropriately zoned development land means the Auckland industrial market is supply-constrained," Dakin says.

Reflecting this supply constraint and the buoyant market, the manager expects the trust to record about a $170 million revaluation gain, an increase of more than 6 percent, in its accounts for the six months ended September, lifting the portfolio's value to more than $2.8 billion.

Goodman says the trust's capitalisation rate – which moves down as property values rise – has strengthened – or declined – by about 30 basis points to 5.4 percent since March on a like-for-like basis.

(BusinessDesk)

ends

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Consumer NZ Testing: Nine Sunscreen Brands Fail Protection Tests

Nine different brands fell short in the latest round of testing by Consumer NZ, which covered 20 products. More>>

ALSO:

Media: NZME 'In Discussions' To Buy Stuff

NZME confirms that it is in discussions with Stuff’s owners Nine and has put a proposal to the Government regarding a possible transaction. However, NZME notes that these discussions are preliminary... More>>

Consultation: Plan Of Action To Protect Seabirds

The draft National Plan of Action plan outlines the Government’s commitment to reducing fishing-related captures of seabirds, with clear goals and objectives, supported by an implementation plan. More>>

ALSO:

Housing Issues: Fairer Rules For Tenants And Landlords

The key changes include: - Limit rent increases to once every 12 months and banning the solicitation of rental bids by landlords. - Improve tenant’s security by removing a landlord’s right to use no cause terminations to end a periodic tenancy agreement... More>>

ALSO: