The joint venture between the Goodman Property Trust & Singapore sovereign wealth fund GIC has sold its VXV office portfolio along Fanshawe St in the Auckland cbd to funds managed by US asset manager Blackstone Group LP for $635 million.
The gross sale price of $635 million – $165 million above the estimated value after 2 buildings were added to the portfolio last June – reflects a passing yield of 6.6%.
GIC entered the joint venture, Wynyard Precinct Holdings Ltd, in 2014, making its first investment in New Zealand property. Goodman held 51% and GIC 49% of the venture.
The VXV commercial precinct is on the Victoria Park end of the Wynyard Quarter, which has turned a former industrial & port district into a smart & upmarket office, café & residential precinct. The VXV portfolio comprises 7 lowrise office buildings containing about 88,000m² of space.
John Dakin, chief executive of the Goodman trust’s manager, Goodman (NZ) Ltd, said today: “This is a defining transaction for our business as it completes a repositioning programme that has established the Goodman Property Trust as the country’s leading provider of high quality industrial space. Following this & other contracted sales, Goodman’s $2.2 billion portfolio will be almost 100% invested in the Auckland industrial market.
“We have made tremendous progress with our development programme over the last 5 years, with more than $670 million of new projects improving an already high quality portfolio. The $1.2 billion of asset sales funding this development activity have also deleveraged the balance sheet. With an expected loan:value ratio of below 20% following this sale, we have substantial capacity for future development & investment opportunities.”
The transaction, which remains subject to Overseas Investment Office & freehold landowner approval, is expected to settle late in the 2019 financial year (in the first quarter of next calendar year) and will add about 2.5c to the trust’s pro forma net asset backing. The settlement timing means the sale is not expected to have a material impact on earnings or distributions for the 2019 financial year.
2 February 2018: Blackstone’s Arena Living buys Mt Eden Gardens
27 June 2017: Goodman-GIC joint venture settles Bayleys House purchase
14 May 2017: Goodman-GIC joint venture adds Bayleys House to portfolio
>17 February 2016: Blackstone buys Lendlease’s NZ retirement villages
27 March 2015: Fletcher & Goodman sign up for new Wynyard Quarter building
7 November 2014: Goodman Group buys another Wynyard development block
7 November 2014: GIC buys into Goodman waterfront partnership
Attribution: Company release.