Goodman, Stride announce a flurry of property transactions

Friday 21st December 2018

Listed property vehicles Goodman Property Trust and Stride Property Group have announced a flurry of end-of-year transactions of Auckland properties to reposition their portfolios.

Hot on the heels of announcing the $29 million purchase of an industrial property at Mangere, Goodman has agreed to sell its Concourse property in Henderson to Stride for $35 million.

Stride simultaneously announced the $50.5 million sale of an ASB Bank-tenanted property at Albany to Oyster Management, another fund manager.

Goodman investment director James Spence said the trust bought Concourse, an industrial property with 9,700 square metres of industrial space and 2.17 hectares of development land, in 2016 and hadn’t been planning to sell it but took an “opportunistic” reaction to an unsolicited offer from Stride.

Goodman paid $18.9 million for the two adjoining Concourse sites in September 2016 but Spence said the trust has since added significant value reconfiguring the layout, creating additional yard space and securing new leases.

“It was a compelling offer from Stride and, rather than complete the development of this property, we’ll be reinvesting in new opportunities elsewhere in Auckland,” Spence said.

The sale will add about 0.5 cents per unit to the trust’s net tangible asset backing, and is expected to settle in June next year.

Goodman has a history of recycling capital by selling mature assets and using the proceeds to buy other assets with development potential.

It calls the Mangere purchase “strategic” and has plans to develop 30,000sqm of new warehouse space on the site which currently features a 2,279sqm warehouse and 41,790sqm glasshouse with associated office and coolstore space.

Stride said the Concourse property will give it an initial yield of 6.1 percent and that it is well advanced with development plans for the land.

“This acquisition aligns with Stride’s strategic investment focus on growing its portfolio of quality industrial investment property and builds on Stride’s track record of industrial development expertise,” the company said.

“The West Auckland site has immediate access to the Lincoln Road interchange with connectivity north via the Western Ring Route and south via the Waterview tunnel.”

Stride said it has committed to about $600,000 worth of upgrades to the Albany property and it expects the purchase to settle on April 1 next year.

The sale was at an initial yield of 5.88 percent and a 4.7 percent premium to the property’s value of $48.25 million recorded in Stride’s first-half results for the six months ended September.

“This transaction aligns with Stride’s strategy to recycle capital from non-core assets and into office and industrial assets that we consider will form the base of portfolios that will, in future, become Stride’s new investment management products,” said Stride chief executive Philip Littlewood in a statement.

(BusinessDesk)

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