Archive | Gainz

Evolve buys 6 South Island early childhood centres

Evolve Education Group Ltd has entered into a contract to acquire 6 early childhood education centres in the South Island, increasing its portfolio to 126 centres by June.

The 6 Little Wonders centres are in Dunedin, Oamaru, Timaru & Cromwell, where Evolve had no representation. Little Wonders are purpose built-centres, averaging 80% occupancy in areas of stable & growing demand.

Evolve chief executive Alan Wham said the 6 centres would settle in June and were expected to deliver annualised ebitda (earnings before interest, tax, depreciation & amortisation) of $1.3-1.5 million.

Mr Wham said that, to facilitate the acquisition, Evolve director Mark Finlay & associated interests would acquire the premises they operate in and lease them to Evolve: “The leases are on standard commercial terms for early childcare education centres, for an initial lease term of 12 years and an aggregate initial rental of $100,00/month.”

Mr Finlay was excluded from Evolve board decisions on these leases.

Evolve bought 2 mid-sized centres in Auckland & Canterbury in March and sold a smaller West Coast centre in April.

Attribution: Company release.

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Accor to run Chows’ Rotorua hotel

NZAX-listed property company Chow Group Ltd’s management company, CGML Ltd, has awarded the management contract for its Rotorua hotel to AccorHotels.

CGML bought the 30-year-old, 10-storey, 8000m² office Zens Centre at 1135 Arawa St in 2015 and is converting it into a 130-room hotel.

Director John Chow (pictured in front of the building with mayor Steve Chadwick) said it would carry a 5-star brand. Work on architectural plans has started and the conversion should start in July. It’s expected to open at the end of 2018 or early 2019.

AccorHotels already operates a Novotel in Rotorua and the ibis Rotorua Lakeside.

Ms Chadwick said the retail & tourism sectors were doing extremely well in Rotorua and its economy was performing above the national average: “Rotorua is growing & thriving. Our population now exceeds 70,000 and continues to grow, and unemployment is dropping. It’s important that we continue to build on these positive achievements, and projects such as the Chow Group’s new upscale hotel are critical to our success, improving our tourism infrastructure and creating work opportunities.”

Attribution: Company release.

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Goodman opens 75+25 bond issue

Goodman Property Trust opened a $75 million bond issue on Thursday, with the ability to accept up to $25 million in oversubscriptions.

The 7-year fixed-rate senior secured Goodman+Bonds will have a maturity date of 31 May 2024 and are expected to have an investment grade issue credit rating of BBB+ from Standard & Poor’s. The Goodman trust’s current corporate credit rating is BBB.

The indicative issue margin range is 1.55-1.70%/year. The issue margin & interest rate will be set following a bookbuild process on Friday 26 May. The bonds are expected to be issued on 31 May.

Attribution: Trust release.

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Genesis sets rate for long-term bonds

Genesis Energy Ltd has allocated $225 million of 30-year subordinated unsecured capital bonds in a bookbuild process. There was no public pool.

The interest rate from the issue date to the first reset date (9 June 2022) will be 5.70%/year, which was the minimum rate set out in the terms sheet. The margin has been set at 2.75%.

The offer will close on 7 June. The bonds will be issued on 9 June and will mature on 9 June 2047.

Attribution: Company release.

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Goodman profit steady

Goodman Property Trust reported pretax profit of $220.5 million for the March year, down on last year when revaluations are included, up by a small margin when they’re excluded.

Management company Goodman (NZ) Ltd chair Keith Smith said: “The progression of the development programme, significant asset sales & selective acquisitions are all having a positive impact on the trust, lifting the quality of the portfolio and adding to its financial strength.”

Chief executive John Dakin said: “With more than $535 million of new projects completed since 2012, the trust’s development programme is transforming the portfolio and delivering essential business infrastructure into a growing city.”

Highlights included:

    • Pretax operating earnings of $121.7 million, 9.51c/unit, consistent with earlier guidance and 1.1% higher than a year ago
    • A 15.9% increase in cash earnings to 7.08c/unit and full-year cash distributions of 6.65c/unit
    • $220.5 million pretax profit (including revaluations of $114.7 million), compared to $247.9 million (including revaluations of $145.8 million) in 2016
    • $278.8 million of assets sold
    • 8 new development projects started, with a total project cost of $97 million and yield on additional spend of 8.7%
    • Greater balance sheet capacity, with a look-through loan:value ratio of 30.6% (33.9% last year)
    • An 8.3% increase in net tangible assets to 130.4c/unit (120.4c/unit).

I’ll return to this result later today, after having no time to analyse it yesterday.

Attribution: Company release.

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Ryman unveils plan for 6th Australian village

Ryman Healthcare Ltd announced its intention on Monday to build its 6th Australian retirement village, an $A100 million development in Geelong, 75km down toward the mouth of Port Phillip Bay from central Melbourne.

The 3.2ha village on South Valley Rd in the Geelong suburb of Highton will offer a range of retirement living options as well as aged & specialist dementia care.

Development manager Andrew Mitchell said Geelong, Victoria’s second biggest city, had been on the company’s radar for some time. He said Ryman would consult locals before submitting plans for the village.

Attribution: Company release.

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Goodman-GIC joint venture adds Bayleys House to portfolio

The joint venture between the NZX-listed Goodman Property Trust & Singapore sovereign wealth fund GIC Pte Ltd has added Bayleys House in the Wynyard Quarter to its portfolio.

That acquisition for $62.3 million, and the $86.2 million purchase of the neighbouring Datacom Building, which settled on Friday, take joint venture company Wynyard Precinct Holdings Ltd’s portfolio to 7 buildings worth over $470 million.

The recently completed 6-storey 8106m² Bayleys House backs on to the Fonterra Centre, also in the portfolio. Fonterra at 109 Fanshawe St, and Bayleys at 30 Gaunt St, also front Halsey St in the VXV Precinct which has been developed by ASX-listed Goodman Group on leasehold land owned by Viaduct Harbour Holdings Ltd.

The 7-storey 16,735m² Datacom building is across VXV Plaza from Bayleys, on the corner of Gaunt & Daldy Sts.

John Dakin, chief executive of the Goodman trust’s manager, Goodman (NZ) Ltd, said the partnership strategy provided scale for the trust and gave it greater exposure to Auckland’s fastest-growing commercial precinct.

“Featuring large flexible floorplates and incorporating sustainable architectural elements & energy-efficient building systems, the lowrise office property is designed to a 5 green star rating. It is also expected to achieve a 5-star NabersNZ base building rating when assessed in 12 months’ time.”

Predominantly leased to real estate specialist Bayleys, technology provider IBM & law firm Mayne Wetherell, Bayleys House’s leases incorporate fixed review structures and have a weighted average term of 9 years. The ground-lease obligations are structured for a period of 15 years.

Goodman Group undertook the development on a build-to-lease basis. The purchase price reflects an initial yield of 7.6% on contract rentals, and additional fitout rent increases the passing yield to 8.8%.

The acquisition, which remains conditional on the approval of the landowner, is expected to settle in June.

On settlement, the joint venture’s portfolio will contain 88,000m² of office space for about 20 tenants. When future lease commitments are incorporated, the portfolio will have an occupancy rate of 96% and a weighted average lease term of over 9 years.

Earlier stories:
27 March 2015: Fletcher & Goodman sign up for new Wynyard Quarter building
7 November 2014: Goodman Group buys another Wynyard development block

Attribution: Company release.

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Mediation agreement signed for Ryman’s Devonport village

Ryman Healthcare Ltd said on Friday its new Devonport village was set to proceed following mediation talks with objectors.

The Devonport Peninsula Precincts Society appealed against the development to the Environment Court after Auckland Council planning commissioners granted resource consent in January for the village on Ngataringa Rd.

Ryman, the society, the NZ Institute of Architects & Urban Auckland have since been in mediation over the retirement village plans for the 4.2ha site owned by Ngati Whatua Orakei.

Ryman development manager Andrew Mitchell said differences were resolved amicably and all parties had signed an agreement. The resolution requires final approval from the Environment Court.

The 6 buildings of the proposed village were up to 6 storeys high, and Devonport residents opposed bulk & height. The parties haven’t disclosed changes to height or design, or how the increased traffic on Lake Rd will be dealt with.

It’s the first largescale consent on the North Shore considered under Auckland’s new unitary plan, and the society said on its website the factors opponents raised would remain relevant for the other largescale development sites (see map above).

Link: Devonport Peninsula Precincts Society

Attribution: Company release, society website.

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Argosy restructures debt

NZX-listed Argosy Property Ltd has restructured its syndicated bank facility with ANZ Bank NZ Ltd, Bank of NZ Ltd and Hongkong & Shanghai Banking Corp.

Chief executive Peter Mence said today:

  • The expiry of tranche A ($275 million) has been extended to 31 October 2021
  • Expiry of tranche B (also $275 million) remains at 30 September 2020
  • An additional tranche (tranche C) of $25 million has been added to the facility with an expiry date of 31 October 2021. The total facility is now $575 million.

As at 31 May, Argosy’s weighted average cost of debt, including line fees, margin & interest rate swaps, is expected to be about 5.1%/year and the weighted average debt expiry will be 3.9 years.

Attribution: Company release.

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Goodman plans new retail bond issue

Goodman Property Trust is considering another issue of Goodman+bonds to institutional & New Zealand retail investors.

Goodman has made 3 Goodman+Bond issues, the first maturing in 2015. The others mature in December 2020 & June 2022. Goodman has also has $45 million of bonds issued to the wholesale market.

Trust manager Goodman (NZ) Ltd’s chief executive, John Dakin, said yesterday trust subsidiary GMT Bond Issuer Ltd was considering an offer of 7-year, fixed rate, senior secured retail bonds which would be direct, secured, senior debt obligations guaranteed by the NZX-listed Goodman trust.
Mr Dakin said full details of the offer would be released later in May, when the offer is expected to open.

Goodman has appointed the Bank of NZ and Westpac Banking Corp (through its New Zealand branch) as joint lead managers and Deutsche Craigs Ltd, First NZ Capital Securities Ltd & Forsyth Barr Ltd as co-managers for the proposed offer.

Attribution: Company release.

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