Archive | General Property Trust

World property Th2Oct14 – New GPT fund, Brisbane apartments sell fast, Daiwa signs Australian housing JV, consents San Francisco style

GPT launches $A376 million Metro Office Fund
Lend Lease scores with new Brisbane apartments
Australian fund manager signs JV with Daiwa House
And you thought consents were hard to get here?

1.55pm:
GPT launches $A376 million Metro Office Fund

The GPT Group completed its fully underwritten $A255 million bookbuild yesterday for the $A376 million GPT Metro Office Fund, which will open with a portfolio of 6 A-grade metropolitan & business park properties in Sydney, Brisbane & Melbourne.

Link: GPT Metro Office Fund bookbuild completed

Lend Lease scores with new Brisbane apartments

Lend Lease Corp launched its new Brisbane apartment development, The Yards, on Saturday – and sold 160 apartments in 4 hours.

The regeneration development, in the Royal & National Agricultural & Industrial Association Showgrounds, will have 401 residences – 208 in the 18-storey North Yard tower, 182 in the 16-storey South Yard tower standing above King St, the new high street connecting St Paul’s & Gregory Terraces, and 11 terraces.

Prices ranged from $A375,000 for a one-bedroom apartment to $A702,500 for a 2-bedroom & 2-bathroom apartment. Lend Lease said the release was launched in Brisbane & Sydney and 87% of sales were “onshore”.

Links: The Yards
Lend Lease, Brisbane Showgrounds

Australian fund manager signs JV with Daiwa House

Australian real estate fund manager EG signed a joint venture agreement in Tokyo on Tuesday with Japan’s largest home builder, Daiwa House, its Australian subsidiary Cosmos and Sumitomo Forestry.

The Japanese partners will hold a 75% share of EG’s 300-home Summer Hill development in Sydney. It’s Daiwa’s first residential deal in Australia.

EG, founded in 2000, has $A1.25 billion of assets under management on behalf of industry & public sector superannuation funds and a range of family offices.

EG development director Grant Flanigan said the group’s Yield Plus infrastructure fund bought the Summer Hill site in 2007. EG now has an $A3 billion pipeline which it wants to develop over the next 3 years, including Sydney sites in Drummoyne & Five Dock, and inner-city Northbridge in Perth.

Link: EG enters joint venture with Daiwa House

And you thought consents were hard to get here?

Planetizen had a story last week (referring to the original in the New York Times) about the application to place artificial turf on 4 soccer fields in San Francisco’s Golden Gate Park, with floodlighting. Easy? No.

As Auckland’s unitary plan hearings get underway – with simplification an imperative – it’s a good example of how process can become convoluted & destructive.

Links: Planetizen, The story behind the ‘most vetted soccer field in US history’
New York Times, ‘Parks & recreation’ comes to life in San Francisco

Attribution: GPT, Lend Lease, EG, Planetizen

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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World property M31Mar14 – Canadians buy into Chinese housing, GPT buys half a mall, CFS Retail internalisation done, Westfield advances to split, shift in debt currency, second 360 Capital listing

Canadian pension fund enters housing joint venture with China Vanke
GPT fund buys half of Melbourne shopping centre from Canadian fund
CFS Retail completes internalisation, Dexus takeover of office fund nears completion
Westfield organises funding for new group split
A-Reit shifts funds from euro to yen
Newly listed 360 Capital to list office fund separately

Canadian pension fund enters housing joint venture with China Vanke

The Canada Pension Plan Investment Board has formed a new venture with China’s largest residential developer, China Vanke Co Ltd, to invest $US250 million in the Chinese residential market over time.

The Canadian board’s senior vice-president of real estate investments, Graeme Eadie, said on Tuesday the venture would focus on new residential development projects in large cities where incomes are rising and economic fundamentals are strong.

“It is expected that these factors will provide significant demand for middle-income housing. To seed the venture, the board & Vanke are investing in a project in Qingdao, Shandong Province.”

China Vanke chairman Wang Shi.

China Vanke chairman Wang Shi.

Vanke was founded in 1984 by chairman Wang Shi, had revenue of $US22 billion in 2013 and has developments in 65 Chinese cities & 4 cities in other countries. It’s developed over 500,000 residential units and provides property management services to over 400 residential communities.

At 31 December 2013, the Canadian board had $C23.4 billion invested in Asia, representing 11.6% of its total portfolio, C$4.2 billion of the Asian investment is in real estate.

China Vanke entered the US property market in February 2013 when it signed a joint venture with Tishman Speyer LP, of New York, to develop 655 apartments in 2 joined towers in San Francisco.

Tishman Speyer has been a major commercial property developer in China. Its latest joint venture there, signed last September, is with Shanghai Lujiazui Group for 300,000m² of mixed-use development in the New Bund, south of the Shanghai Expo site in Pudong, featuring offices, upmarket retail & waterfront apartments.

China Vanke said on 4 March the China Securities Regulatory Commission had approved its request to transfer its listing of B shares in Shenzhen into H shares listed in Hong Kong. China Vanke will retain a listing for its A shares in Shenzhen.

Links:
Canada Pension Plan Investment Board
China Vanke
Tishman Speyer

GPT fund buys half of Melbourne shopping centre from Canadian fund

Australian property group GPT said on Thursday the GPT Wholesale Shopping Centre Fund had bought a 50% interest in the Northland Shopping Centre in Melbourne from the Canada Pension Plan Investment Board for $A496 million.

GPT chief executive & managing director Michael Cameron said the transaction represented an initial yield of 6.1% and a core capitalisation rate of 5.8%. It’s due to settle on Wednesday 30 April.

The super-regional centre 11km north of Melbourne’s cbd is co-owned & managed by CFS Retail Property Trust Group, which GPT unsuccessfully tried to take over (see next item). It has 91,536m² gross retail floor area, 3300m² office, 315 tenants, 4800 parking spaces, annual sales turnover of $A493 million

Link: GPT

CFS Retail completes internalisation, Dexus takeover of office fund nears completion

The Commonwealth Bank of Australia-controlled CFS Retail Property Trust completed its management internalisation last Monday, 24 March.

It was one of 3 property asset disposals the bank proposed last July. The first to be implemented was internalisation of Kiwi Income Property Trust’s management, which unitholders approved in December.

The second was the divestment of the $A3.9 billion Commonwealth Property Office Fund. The bank also proposed internalising this fund’s management last July, but Dexus Property Group swooped the next day, acquiring 14.9% of it by way of a forward contract, and thereby preventing anyone else from going to compulsory acquisition.

Another big ASX-listed property group, GPT, tried to buy the Commonwealth fund but gave up at the end of January. On 3 March, Dexus, partnered by the Canada Pension Plan Investment Board, said it had over 90%. Its takeover will be completed on Friday 4 April.

The retail property trust’s internalisation included acquiring the bank’s retail property asset management business and the relevant entities to begin the investment management of a number of wholesale property funds.

The new-look trust will manage $A13.9 billion of assets, and has 28 directly owned retail assets, 15 strategic partners & 5000 retailers.

Former Kiwi Income Property Trust chief executive Angus McNaughton, who’s been Colonial’s property managing director, has become chief executive & managing director of the internalised entity.

Mr McNaughton said the 28 retail assets would remain the revenue driver: “We will maintain our existing focus on the intensive asset management of our directly owned shopping centres. This includes the redevelopment & strategic remixing of our assets to create a compelling retail offer, driving shopper traffic & sales.

“Internalisation will allow further enhancements to our strategy. A strategic partnerships business will be added to the trust, making our offer complete through the addition of wholesale property funds & mandates, and retail property asset management.”

Link: Colonial First State Global Asset Management

Westfield organises funding for new group split

The Westfield Group advanced its newest restructure this week, saying on Wednesday it had entered into funding commitments for $A22 billion of financing facilities which are required for the proposal to establish Westfield Corp and Scentre Group.

Westfield announced the proposal to rearrange the group & the Westfield Retail Trust in December. Scentre Group will own the combined Australia & New Zealand business and will be internally managed. The rest of the business – malls in the US, UK, Europe & Brazil – will become Westfield Corp.

Subject to court approval, Westfield will dispatch the securityholder booklet, including the independent expert’s report, in late April. The meeting to consider the proposal will be held on Thursday 29 May.

This week’s announcement followed the completion last week of the $US800 million acquisition of the remaining 50% of Westfield World Trade Centre and the conditional agreement to sell 3 assets in the UK for $A1.1 billion.

The $A22 billion of funding commitments includes $A14 billion of 2-year bridge facilities, with an option to extend by a further 12 months, and $A8 billion of 2- to 6-year bank facilities.

The present group & trust manage $A70 billion of assets in 90 malls containing 20,500 retail outlets.

Link: Westfield corporate

Earlier story, 8 December 2013: Westfield restructure up for approval next May

A-Reit shifts funds from euro to yen

Ascendas Funds Management (S) Ltd, the manager of Singapore’s A-Reit (the Ascendas Real Estate Investment Trust, is moving $S395 million (€197.5 million) out of commercial mortgage-backed securities denominated in euros into floating rate yen notes.

A-Reit’s trustee has issued ¥5 billion of notes due in March 2021 to institutional & sophisticated investors. A swap agreement translates the proceeds into $S62.31 million.

Newly listed 360 Capital to list office fund separately

Australian syndicate manager 360 Capital Group Ltd continues to reshape the entities its investors are involved in, as it takes the 360 Capital Office Fund to an ASX listing 6 months after listing the parent group.

Former James Fielding Ltd executive Tony Pitt formed 360 Capital in 2006 to invest in direct property assets, property securities & various corporate real estate acquisitions on a private equity basis. The group expanded in 2010, when it bought the Becton residential & retirement village development group’s $A1 billion Becton Investment Management Ltd.

Last October, it obtained a backdoor listing on the ASX through the struggling Trafalgar Corporate Group. When it listed, 360 Capital Group managed 10 investment funds & trusts holding 28 industrial, office & retail assets valued at $A860 million on behalf of over 8500 investors. It also held $A91 million in co-investments in its managed funds and 2 direct assets valued at $A49 million.

360 Capital RE Ltd, the responsible entity for the 360 Capital Office Fund, said on Wednesday it had completed the institutional capital-raising component of the office fund’s fully underwritten $A155 million recapitalisation, restructure & listing proposal and trading in the new units was expected to open on Thursday 24 April.

It has an $A235 million portfolio of 4 assets, 99.6% leased, 36.5% gearing, distributions tax-deferred at about 65% and reflecting an 8.5% distribution yield on the $A2 issue price.

Link: Capital Group

Attribution: Canada Pension Plan board, China Vanke, Tishman Speyer, GPT, CFS, Dexus, Westfield, A-Reit, 360 Capital

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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GPT exits US seniors portfolio to refocus on Australia

Published 21 February 2011

The GPT Group announced binding contracts last Wednesday for the sale of its US seniors housing portfolio to Health Care REIT Inc, a publicly traded US real estate investment trust for $US890 million, reflecting a passing yield of 6.2%.

GPT chief executive & managing director Michael Cameron said the sale marked an important milestone in delivering on the group’s strategy of exiting non-core businesses and focusing on the active ownership of high-quality Australian retail, office & industrial assets.

The US seniors portfolio consisted of a 95% interest in 34 senior living communities. Mr Cameron said GPT would net $A324 million for its equity interest in the portfolio after sale costs, taxes and the release of asset level debt, realise an $A119 million capital gain against the June 2010 book value of $A205 million and increase NTA by A6c/share.

With this sale, GPT has exited all but 2 of its offshore non-core assets. The exceptions are small interests in 2 real estate funds in Europe.

The sale is due to settle by June and would be earnings neutral for GPT in 2011. It will initially use the proceeds to reduce borrowings, cutting group gearing from 25% to 22.5%.

Mr Cameron said GPT had identified this portfolio as non-core in 2008, but continued to hold it until a value-creating sale could be completed. “With improvements in the US investment market now occurring and an increase in the level of interest by potential buyers, the timing is right for us to exit the sector. The sale delivers a substantial uplift against current book value and a lift in GPT’s NTA, which is an important focus for us.

“The divestment delivers on our commitment to return to the active ownership, management and development of high quality Australian real estate. It also provides additional capacity to reinvest into compelling opportunities in Australia and undertake alternative capital management strategies.”

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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GPT’s $A1.9 billion wholesale shopping centre fund oversubscribed

Published 4 April 2007


GPT (the General Property Trust) has sold $A1.9 billion of prized Australian shopping centres into a wholesale fund, which closed oversubscribed on Monday.


The GPT Wholesale Shopping Centre Fund will own 50% of the super-regional Highpoint Shopping Centre & adjoining Homemaker City Maribyrnong bulky goods centre in Melbourne and 50% of the Macarthur Square major regional centre in Sydney.


Highpoint has gross lettable area of 120,770m² and the book value of the fund’s interest is $A622.5 million, Homemaker City 21,200m² & $A29.5 million, Macarthur Square 90,500m² & $A411.5 million (all figures for 100%).


The new fund will own 100% of 5 other centres: Wollongong Central, 39,300m² & $A217.7 million; sub-regional centre Carlingford Court, 33,100m² & $A192 million; & neighbourhood centre Forestway, 9600m² & $A78.1 million, all in New South Wales; plus 2 Victorian regional centres, Chirnside Park, 37,400m² & $A200 million; & Parkmore, 36,400m² & $A175 million.


GPT chief executive Nic Lyons said establishment of the fund was consistent with GPT’s stated strategy of growing its funds management business, building on the success of the group’s first wholesale fund, the GPT Wholesale Office Fund, which was launched in July 2006.


“The growth of the group’s wholesale funds management platform to meet the increasing demand from institutional investors for direct property exposure to quality real estate assets represents an important part of GPT’s growth strategy. “In addition to leveraging the skills & experience of our team, GPT’s development of a funds management platform provides us with potential for stronger earnings growth and deepens the group’s access to a number of different capital sources,” he said.Matthew Faddy has been appointed fund manager after several years as chief operating officer of GPT’s retail business.


GPT will hold 40% of the fund and continue to hold an $A3.8 billion portfolio of 16 retail property assets (including the other half of the 50% interests sold into the fund).


The selldown of the portfolio to the fund was worth $A1.2 billion to GPT from about 20 institutions’ purchases of equity, which it will initially use to retire debt. “This will enhance GPT’s capacity to fund its significant development pipeline (which through assets held on balance sheet and within the group’s wholesale funds has a potential value of about $A3 billion), to fund the additional capital commitment to the group’s joint venture with Babcock & Brown and to further invest in opportunities across the group’s investment portfolio.”Mr Lyons said the fund was launched with no gearing, so it had significant capacity for further investment. “In addition, the fund has substantial development potential, including development projects identified across the existing assets in the medium term.


Website: GPT


 



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Attribution: Company release, story written by Bob Dey for this website.

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GPT confirms Highpoint purchase

Published 21 March 2006


General Property Trust has bought 50% of the Highpoint shopping centre in Melbourne, plus management rights, for $A621.2 million after confirming Myer Ltd wouldn’t exercise its right of refusal over the 50% interest. Settlement is scheduled for 31 March.



GPT anticipates a first-year yield of 5.8% (5.5% including acquisition costs) on its investment.GPT chief executive Nic Lyons said: “Highpoint is one of Australia’s top 10 super regional centres and is the only regional shopping centre servicing the western & north-western suburbs of Melbourne. Following completion of a recent expansion, the centre will consist of 126,000m² gross lettable area with about 400 retail tenancies.”The 50% interest was sold by the Besen family, which retains the other 50%. The family also owns the Sussan chain of fashion stores.


Earlier story:


19 February 2006: GPT wins deal to buy Highpoint 50% from Besens If you want to comment on this story, write to the BD Central Discussion forum or send an email to [email protected].


 


Attribution: Company statement, story written by Bob Dey for this website.

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GPT Homebush buy creates potential $A400 million business park

Published: 2 August 2005


General Property Trust, now fully split from its former manager, Lend Lease Corp, has exchanged contracts to buy a 12,900m² site in the Homebush Bay Olympic Park precinct in Sydney which, it says, could lead to $A400 million of development.



The leasehold commercial site at 5 Figtree Drive cost GPT $A19 million plus acquisition costs, putting it on a 7.5% initial yield. GPT’s industrial & business parks portfolio manager, Victor Georos, said when it was combined with 2 adjoining sites the consolidated parcel exceeded 3.1ha and had potential for a redevelopment worth an estimated $A400 million.


Since GPT bought its first Homebush site in July 2001 it’s spent $A110 million buying land in what Mr Georos said had become a vibrant business park precinct. It’s near a 2.3ha campus-style office building the trust is building for the Commonwealth Bank and would benefit from the extra retail mix provided as part of that development.


“This acquisition is a logical extension of our development pipeline in the precinct, which includes the development of the 4th & final stage of the Quad, which has been submitted for development approval, and expansion redevelopment potential at the nearby adjoining 2.5ha Samsung site.”The 5 Figtree Drive site is subject to a 99-year $A1/year peppercorn ground lease from the Sydney Olympic Park Authority, expiring in January 2088.GPT is acquiring the 9000m² office & warehouse facility from Acer Computer Australia Pty Ltd on a 4-year leaseback. The site has potential for 40,000m² of development.


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GPT unitholders vote to split from Lend Lease

Published: 2 June 2005


General Property Trust’s management won support today for its proposal to take management inhouse and embark on a change of investment direction which will see the trust team up with investment banker Babcock & Brown for about 15% of its portfolio.



78% of all issued units were voted at the meeting in Sydney to decide GPT’s fate. All resolutions were passed by their required majorities.


But the key resolution, taking management inhouse, wasn’t decisive – the vote went 55.9% for it, 44.1% against.


The first change is for GPT Management Ltd – an arm of Lend Lease Corp Ltd, which has been the trust’s manager – to be replaced by Australian Diversified Funds Management Ltd, which will then be renamed GPT RE Ltd.


The next change is for GPT to move to a stapled security structure.


Lend Lease tried unsuccessfully to take GPT over last year and that bid was followed by another unsuccessful one from Stockland Property Group. GPT’s management then proposed its combination of internalising management, teaming up with Babcock & Brown to invest internationally – about 15% of its portfolio initially, starting with a package of European residential portfolios – and selling interests in 3 of its main shopping malls to Westfield Group.


Lend Lease still tried to get in the way of the GPT management’s moves, belatedly coming up with its own proposal to allow GPT management to shift from Lend Lease to inhouse at GPT – a bid designed to prevent the Babcock & Brown venture and the sale to Westfield.


The split got nasty early in May, when Lend Lease accused GPT management of trying to steal its staff. GPT management announced that staff voluntarily shifted to their camp, and that they’d filled all the executive roles they needed to proceed with inhouse management.


After today’s vote, Lend Lease said it would support “a smooth & expedient transition of some of its staff & resources”.GPT agreed to pay Lend Lease $A16.5 million for co-operation, services & assets in the transfer of responsibility.


Each new stapled security will consist of one share & one unit. Unitholders in the GPT split trust (split growth & income units) have 28 days to call a meeting to consider the winding up of that trust. If they don’t force a meeting, the winding up will just proceed. In the meantime they can convert to GPT ordinary units; once the winding up starts they’ll lose their redemption rights.


GPT chairman Peter Joseph told the Sydney meeting internalisation alone – the Lend Lease solution – “represents inferior value to GPT unitholders and will make GPT unstable in the future. It will also deprive unitholders of most of the $A880 million value uplift for GPT & the 16.5% increase in distributions delivered by the package of proposals.


“To offer unitholders the option of ‘internalisation alone’ would risk opening the door to a falling unit price & continued instability. We believe it would leave GPT vulnerable to another undervalued hostile takeover bid. These consequences would, in turn, demotivate our management, make it difficult to keep the best staff and impossible to attract new people of the calibre we need. Independence alone would be a recipe for instability, which itself undermines independence. We need to stay out of this ‘swamp of uncertainty.'”


Mr Joseph acknowledged the sale of mall interests to Westfield was contentious. Then he put it in the context of how the rest of the property industry, including Lend Lease, was trying to fit GPT up: “We know that late last year and early this year, Lend Lease, Westfield, Stockland & other major participants in the Australian listed property trust sector were variously discussing between themselves the future of GPT.”


He said the deal with Westfield stopped Westfield – and others – putting together alternatives that would have been less beneficial to GPT unitholders.


The European venture is an $A1 billion investment, 90% of the money for it coming from GPT. In Australia, it will still own a diversified portfolio valued at $A8.2 billion .Its retail portfolio will be cut from $A4.7 billion to $A4 billion, but it will still be the 2nd biggest retail portfolio in Australia.


Mr Joseph said GPT wouldn’t be standing still in Australia – it had identified $A1 billion of development opportunities.


He suggested GPT’s units would trade in a range of $A3.61-3.81 after the vote, above the $A3.61 close on Wednesday. Ironically, what got the price up there was the takeover speculation that had proved so disruptive – a year ago, before the Lend Lease bid, GPT units were trading at just over $A3. In the absence of the management’s proposals succeeding or another bid being made, the price would fall again.


Earlier stories:


14 May 2005, page 1: Grant Samuel’s GPT assessment has wider relevance, and Lend Lease critique raises serious questions


Page 2: Grant Samuel questions European deal but doesn’t put it down, says Westfield price fair


Page 3: Lend Lease chiefs say GPT package less rewarding & riskier


 


11 May 2005: Lend Lease tells GPT unitholders to vote no


10 May 2005: GPT split from Lend Lease gets nasty


22 March 2005: GPT’s European investment venture outlined


4 March 2005: Stockland still under 1% of GPT as bid closes


17 February 2005: GPT plans global venture with Babcock & Brown, internalised management, to sell interests in 3 malls to Westfield


 


Websites: GPT internalisation proposal


General Property Trust


Lend Lease


Babcock & Brown


 


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Stockland still under 1% of GPT as bid closes

Published: 4 March 2005


Stockland Property Group didn’t make it to 1% of General Property Trust in its failed takeover bid, made after GPT’s manager, Lend Lease Corp Ltd, was also rebuffed.


Stockland’s daily notices to the ASX looked fine if you took away the decimal point. By Thursday it had 0.7777% of GPT. Its offer closed today.


So, after fighting off 2 takeover bids in the past year, GPT can get on with its own expansion programme, outlined last month.


Earlier stories:


 


17 February 2005: GPT plans global venture with Babcock & Brown, internalised management, to sell interests in 3 malls to Westfield


24 January 2005: GPT pulls out overdue revaluations to show how bad Stockland offer is


21 December 2004: Grant Samuel sees nothing compelling in Stockland offer for GPT


18 November 2004: Lend Lease merger with GPT blocked


9 November 2004: Stockland upsets the Lend Lease applecart


8 August 2004: GPT’s independent directors agree to new Lend Lease merger terms


28 July 2004: GPT’s independent directors reject Lend Lease merger offer


25 May 2004: Lend Lease proposes merger with General Property trust to create $A10 billion business


 


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Pleased as punch at GPT – just don’t believe the numbers




Published: 12 February 2005


General Property Trust produced an annual result on Friday which shows it’s doing very well. Unfortunately, after the January release of revaluations used to dampen enthusiasm for Stockland Property Group’s hostile takeover bid, many comparisons of GPT’s annual performance can’t be made with any accuracy.



GPT increased its retail portfolio by a net $A612.5 million through revaluations in 2004, $A29 million more than it indicated 3 weeks ago when it used a bunch of very belated revaluations to discourage support for Stockland Property Group’s hostile takeover bid.


Some of GPT’s properties hadn’t been revalued since 2001.


The balance sheet shows GPT has $A9.1 billion of assets, 29.7% gearing (against a maximum 40% allowed).


Gross assets were increased by $A1.4 billion from $A7.7 billion, but on my reckoning from the figures released in January that would include $A900 million gross in revaluations. Against the other $A500 million of asset growth the trust has increased borrowing $A600 million to $A2.7 billion. Gearing, as a consequence, is up just over 2 percentage points, from 27.6% to 29.7%.


Despite the 18% rise in gross assets & 11.7% asset growth through revaluation, net tangible asset backing increased only 10.6%, from $A2.73/unit to $A3.02/unit. Interest cover fell from 5.1 times to 4.8 times. Net assets rose $A778 million to $A6.1 billion, a 14.6% gain.


What would all these comparative figures look like if GPT had revalued annually? Gross assets certainly wouldn’t have risen 18% in the last year.


The presentation to analysts by GPT Management Ltd chief executive Nic Lyons began with a distinction between “underlying earnings”, up 3.1%, and “headline earnings,” which he said “were impacted by costs accrued to date associated with the Lend Lease merger proposal and the response to the takeover offer from Stockland.”


Despite the drag of these sharemarket exercises, Mr Lyons made no apology for accepting the rise in unit price which has accompanied the bids. Proudly he said: “GPT’s unit price increased over the year, from $A2.99 to $A3.74. GPT’s full-year accumulation (unit price movement & income) return for 2004 was 33.6%, above the S&P/ASX Property 200 Accumulation Index, which delivered a total return of 32%.”


Compare that great return to the previous 3 years’ – 9.9% in 2001, 12.8% in 2002, 8.2% in 2003.


Somewhere in all these pages of presentation, I thought, there’s bound to be a profit figure. It’s in the small print, the no-gloss directors’ report. GPT increased its profit for the year by $A6.2 million – up 1.5% to $A426.4 million.


That was on revenue up 8.2% to $A780.8 million, but with $A53 million of that $A59.2 million gain taken away in increased expenses, up 17.6% to $A354.4 million. The net increase in revaluation reserve was $A579.2 million, up from $A235 million in 2003.


Website: General Property Trust


 


Earlier story:


24 January 2005: GPT pulls out overdue revaluations to show how bad Stockland offer is


 



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GPT pulls out overdue revaluations to show how bad Stockland offer is




Published: 24 January 2005


General Property Trust used a partial portfolio revaluation today to attack Stockland Property Group’s hostile takeover bid – and in doing so exposed a rort in its own camp.


A schedule which GPT issued today showed a total 32.6% gain on 12 properties of $A894 million, plus a probable gain from a property whose previous valuation wasn’t given. GPT’s statement said the impact of all independent valuations in the 2nd half of 2004 was an $A583.7 million gain – giving a 10.2% gain in net asset backing in 6 months.


The trust’s manager, Lend Lease Corp Ltd, tried unsuccessfully to execute a friendly merger last year but institutions threw the bid out in November.


The lower valuations were as advantageous to the Lend Lease/GPT cause last year as the revaluations will be disadvantageous to the Stockland cause this year.


Stockland’s bid is not over-generous and might still be rejected as well. But the failure to get these revaluations done ahead of the friendly merger attempt raises another question about the management at Lend Lease & GPT.


Overdue revaluation commissioned “because strong increases evident”


General Property Trust chief executive Nic Lyons said the trust’s independent directors had commissioned independent valuations for certain assets at the end of last year because the weighted average age of valuations was by then beyond 20 months “and there was evidence of recent strong increases in the values of retail shopping centres.”


The biggest rise in the schedule supplied to the ASX was in Melbourne Central’s retail component, which went from $A183 million on a 10.13% cap rate – valuation 30 September 2001 – to $A412.2 million at 7% on 31 December 2004.


125% rise – in the last 6 months?


That’s an $A230 million, 125% rise and a strengthening in cap rate of more than 3 percentage points. The 2001 valuation was on GPT’s books at June 2004 and released to the public on 29 July 2004. An end-of-year valuation for December 2003 would have made sense if the trust was keeping the public aware of its real value.


The spectacular rise at Melbourne Central has not been explained in the trust’s press release today and has also not been explained in the supplementary target’s statement signed off by Peter Joseph, chairman of the trust’s independent directors.


Next biggest valuation rise was by Penrith Plaza’s retail property, up $A168million in value from $A505 million on a 6.75% cap rate in September 2003 to $A672.8 million on a 5.75% cap rate at 31 December 2004. That prior valuation date was within 12 months of the friendly merger period, but that for Woden Plaza was done 6 months earlier than Penrith’s.


Woden Plaza showed the 3rd biggest valuation rise, $A98 million, from $A386 million on a 7.5% cap rate at March 2003 to $A484 million on a 6.25% cap rate at 31 December 2004.


$A300 million discrepancy


There’s an $A300 million discrepancy between the overall portfolio gain trumpeted by the trust and the figures in its revaluation chart. If other properties have lost $A300 million in value they should be mentioned.


However, the GPT statement is all positive:

NTA should be up 10.2% in the space of only 6 months, from June to December 2004, from $A2.74/unit to $A3.02; the audited financial statements will be released on 11 February
The total of December 2004 revaluations is an $A583.7 million gain in book value
The higher valuations have cut GPT’s gearing level by 2%
The weighted average cap rate of GPT’s shopping centre assets is now 6.5%
By comparison, Stockland’s centres have a 7.8% cap rate
The Stockland offer, which has been extended to 4 February, “represents an insufficient premium:nta of 21% when the weighted average premium observed in listed property trust mergers in 2004 was 34%”
The Stockland offer would dilute GPT investors’ nta by 13%.

Stockland said in its annual report its shopping centre portfolio gained 8.5% through $A167 million of revaluations in the year to June 2004.


Websites: GPT


http://www.gpt.com.au/


Lend Lease


http://www.lendlease.co.nz/


Stockland


http://www.stockland.com.au


 


Earlier stories:


21 December 2004: Grant Samuel sees nothing compelling in Stockland offer for GPT


24 November 2004: Stockland files bid for GPT


18 November 2004: Lend Lease merger with GPT blocked


9 November 2004: Stockland upsets the Lend Lease applecart


8 August 2004: GPT’s independent directors agree to new Lend Lease merger terms


28 July 2004: GPT’s independent directors reject Lend Lease merger offer


25 May 2004: Lend Lease proposes merger with General Property trust to create $A10 billion business


 


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