GIC-Goodman joint venture sells Wynyard office precinct to US private equity for $635M

Friday 18th May 2018

Wynyard Precinct Holdings, a joint venture between Goodman Property Trust and Singapore's government-owned GIC, has sold its commercial office precinct in Auckland to US private equity firm Blackstone for $635 million, twice the property's value when the venture was set up.

GMT’s 51 percent stake in Wynyard Precinct means its share of the sale is $323.9 million.

The property, known as the VXV portfolio, consists of seven low-rise buildings comprising 88,000 square metres of floor space. The sale comes three-and-a-half years after Goodman and GIC entered into the joint venture to co-invest in Auckland’s Viaduct Quarter development.

The sale, which is subject to Overseas Investment Office and freehold landowner approval, would provide a yield of 6.6 percent, Goodman said. It’s expected to settle late next year.

The initial six-building portfolio was valued at $313 million when GIC came on board, and the joint venture acquired the seventh building for $68.2 million. The sale price exceeds the joint venture’s target of lifting the portfolio’s value to $500 million and will add about 2.5 cents to Goodman’s net tangible assets, last valued at $1.303 per unit, it said.

Goodman NZ chief executive John Dakin said the transaction was part of a wider plan to reposition the property trust’s focus towards high-quality industrial space.

“Following this and other contracted sales, GMT’s $2.2 billion portfolio will be almost 100 percent invested in the Auckland industrial market,” he said.

Goodman said the timing of the sale meant it won’t have a material impact on earnings or distributions in the 2019 financial year.

Dakin said the sale will reduce the property investor’s level of debt, giving it headroom to embark on new investments and developments.

“With an expected loan to value ratio of below 20 percent following this sale, we have substantial capacity for future development and investment opportunities,” he said.

Goodman units rose 0.4 percent to $1.385 and have gained 10 percent over the past year.

(BusinessDesk)

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