Archive | Securities – overseas

Cromwell reit spends $647 million to add 23 European properties to portfolio

Brisbane-based ASX-listed Cromwell Property Group completed an $A228 million ($NZ242.5 million) capital-raising at the start of this month intended largely to contribute to its share in a 23-property investment by the European trust it launched in 2017.

For decades, Australia & New Zealand have been targets for limited investment by European & North American investors & funds, and Cromwell is an investor in New Zealand through its 50% ownership of New Zealand property funds manager Oyster Property Group Ltd.

Northbound investment by Australian interests is a burgeoning trade, done through a variety of Australian & offshore vehicles and aimed at various sectors, including student accommodation, industrial, retail & office stock.

Cromwell’s European investment is more complicated than its New Zealand investment – Cromwell of Australia listed the Cromwell European Real Estate Investment Trust on the Singapore securities exchange in November 2017, holds a 35.3% interest in the trust and manages the European portfolio on behalf of the trust.

Cromwell sought $A210 million ($NZ223 million) through an entitlement offer at the end of November, closing at the start of January, aiming to raise a total $A300 million ($NZ319 million), including commitments received from major securityholders, and pulled in $A228 million ($NZ242.5 million) from other investors. Of that, $NZ133 million (€79 million) has gone to pay the Australian group’s share of a simultaneous capital-raising by the Singapore-listed reit, and some to reduce the Australian company’s gearing from 37% to between 30%-33%.

The Singapore-listed reit’s 23-property acquisition is costing it €384 million ($NZ647 million), to be partially equity funded through a €224 million ($NZ377 million) equity-raising.

The new European assets are in 3 portfolios – 11 properties in Finland, 5 properties in Poland & the Netherlands, 5 in France & 2 in Italy.

10 of the Finnish properties, acquisition now settled, are in Helsinki, one in the rapidly growing regional hub of Kuopio, a university city in the east of Finland, with a total valuation of €116.8 million ($NZ197 million), and 61972m² lettable floor area.

Cromwell chief executive & managing director Paul Weightman said: “The success of CEREIT has facilitated the ongoing transition of our European assets under management to more permanent sources of capital. About 45% of European assets under management will be long-term in nature following the completion of CEREIT’s recently announced acquisitions.”

Cromwell’s head of Nordics, Tomas Beck, added: “We are currently operating in a buoyant office market in Finland, supported by strong domestic demand, job growth & rising consumer confidence. These conditions have put upward pressure on rents in high quality, well located buildings that offer efficiency & connectivity.”

As of June 2018, Cromwell had a market capitalisation of $A2.2 billion, a direct property investment portfolio in Australia valued at $A2.5 billion ($NZ2.7 billion) and total assets under management of $A11.5 billion ($NZ12.2 billion) across Australia, New Zealand & Europe.

Cromwell European REIT (website open only to Singapore residents)
Cromwell Property Group

Attribution: Company releases.

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CapitaLand to take over Ascendas & Singbridge portfolios

Singaporean property giants CapitaLand Ltd & AscendasSingbridge Pte Ltd announced their intention to merge their interests yesterday, in a $S11 billion deal combining $S116 billion of assets under management in 6 asset classes in 180 cities & 32 countries.

Current asset totals are $S92 billion for CapitaLand, $S24 billion for Ascendas-Singbridge.

In the background is Singapore Government-owned Temasek Holdings (Pte) Ltd, incorporated in 1974 and holding a $S308 billion portfolio at March 2018, mainly in Singapore & through Asia. Temasek owns AscendasSingbridge and will increase its holding in CapitaLand from 40.8% to 51% through this transaction.

In the transaction, CapitaLand will buy the Ascendas & Singbridge subsidiaries from AscendasSingbridge Pte Ltd, subject to a vote by CapitaLand’s independent shareholders, expected to be called in the first half of this year, with completion of the deal in the third quarter. Temasek will receive $S3 billion cash, $S3 billion in CapitaLand shares.

The shares are priced at $S3.50, representing an 11.3% (S36c) premium over CapitaLand’s one-month volume-weighted average price of $S3.1447.

CapitaLand owns & manages a $S92 billion global portfolio comprising integrated developments, shopping malls, lodging, offices, homes, real estate investment trusts & funds. Its core markets are Singapore & China, but it operates in 160 cities in 32 countries. It has one of the largest investment management businesses in Asia and a stable of 5 reits listed in Singapore & Malaysia – CapitaLand MallTrust, CapitaLand Commercial Trust, Ascott Residence Trust, CapitaLand Retail China Trust & CapitaLand Malaysia Mall Trust.

Ascendas Pte Ltd & Singbridge Pte Ltd completed their merger to form the Ascendas-Singbridge group in June 2015. The group is jointly owned by Temasek & JTC Corp (both state-owned) through a 51:49 partnership.

Ascendas-Singbridge Group undertakes projects spanning townships, mixed-use developments, business/industrial parks, offices, hotels & warehouses in Asia, Australia, Europe & the US. It’s a real estate fund manager and holds a portfolio of commercial, hospitality & industrial assets.

Ascendas launched Singapore’s first business space trust, the Ascendas Real Estate Investment Trust (A-REIT), in 2002 and listed the first Indian property trust, Ascendas India Trust (a-iTrust), in 2007. In 2012, it listed the Ascendas Hospitality Trust (A-HTRUST). Ascendas also manages a series of private funds with commercial & industrial assets across Asia.

Ascendas has introduced new business space concepts such as integrated communities & solutions, which combine business, lifestyle, retail & hospitality spaces to create work-live-play-learn environments. Its flagship projects include Singapore Science Park & Changi City at Changi Business Park in Singapore, International Tech Park Bangalore in India and Ascendas-Xinsu in Suzhou Industrial Park in China.

Singbridge invests in, develops & manages integrated cities & sustainable urban solutions in Asia, particularly in China. Its projects include the Guangzhou Knowledge City, the Chao Tian Men mixed development in Chongqing, Chengdu Hi-Tech Innovation Park and the Jilin Food Zone.

Ascendas REIT

Attribution: CapitaLand, Ascendas-Singbridge.

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VXV Fanshawe St sale unconditional

The Goodman Property Trust’s sale of its interest in the owner of the VXV property portfolio along Fanshawe St in Auckland, Wynyard Precinct Holdings Ltd, went unconditional last week.

Goodman said the buyer, a group of funds managed by US asset manager Blackstone Group LP, had received approval from the Overseas Investment Office and the sale would settle this Friday, 14 December.

The 51:49 joint venture between Goodman & Singapore sovereign wealth fund GIC agreed the $635 million sale in May.

After selling $1.2 billion of property over the last 5 years, the Goodman trust’s investment strategy is now exclusively focused on the Auckland industrial market.

The VXV portfolio includes 7 lowrise office buildings, with a total floor area of 88,000m², in the commercial precinct adjoining the Wynyard Quarter.

Earlier story:
18 May 2018: Goodman & Singapore fund sell VXV portfolio to Blackstone

Attribution: Goodman release.

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Goodman & Canadian board ramp up their Chinese investment

Published 29 August 2018
Sydney-based Goodman Group and the Canada Pension Plan Investment Board (CPPIB) have lifted their investment in their Chinese logistics property partnership by 54% and given them the capacity to double the portfolio to 5 million m².

The duo committed an extra $US1.75 billion of equity to the Goodman China Logistics Partnership last week, increasing their total equity commitment to $US5 billion.

Both the new equity & total equity are on an 80:20 basis – the Canadian board adding $US1.4 billion to make its total investment $US4 billion, and Goodman adding $US350 million for a total $US1 billion.

They established the partnership in 2009, to invest in high quality logistics properties in prime locations around mainland China. The development-led strategy centred on major gateway cities, and the partnership has organically grown to a portfolio of 33 properties comprising 2.5 million m² of modern logistics space. Current occupancy is 99%.

Goodman’s Greater China chief executive, Kristoffer Harvey, said when the extra equity was announced last Thursday: “We currently have a number of acquisition opportunities in due diligence. The equity commitment increase provides us with significant firepower to capitalise on these & other opportunities. It also enables us to develop the partnership’s land bank and to grow the portfolio to more than 5 million m² in the medium term.”

Goodman Group chief executive Greg Goodman said: “With its growing middle class, significant e-commerce activity & rapid advancements in technology, China is a core growth area for our business. Our increased commitment alongside our long-term partner in CPPIB will provide sufficient equity to leverage opportunities in the market.”

The pension board’s head of real estate investments in Asia, Jimmy Phua, said: “The fundamentals of the Chinese logistics sector remain compelling, driven by domestic consumption growth in China, including e-commerce which underpins the strong demand for prime logistics facilities. CPPIB’s additional equity reflects the success of the partnership to date and an opportunity to expand our longstanding global partnership with Goodman.”

The pension board’s Asia Pacific head & senior managing director, Suyi Kim, said: “Since 2008, when we established a local Hong Kong office, Asia has been a key investment market for the board. With $C28 billion invested in China today, we are committed to further increasing our exposure over the long term. The board is well positioned as a strong investment partner in the Asia-Pacific region, given our long-term focus & our local team of experienced investment professionals.”

Goodman Group
Canada Pension Plan Investment Board
Goodman China Logistics Partnership

Attribution: Company release.

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World property W12Sept18 – zero emissions, student accommodation portfolio

GPT brings Australian office zero emissions target closer
Singaporean media-based company buys UK student accommodation portfolio

GPT brings Australian office zero emissions target closer

The GPT Wholesale Office Fund (GWOF) has set a target to achieve net zero carbon emissions from its $A7.5 billion office portfolio by the end of 2020.

Image above: Australia Square, Sydney.

That portfolio comprises 18 of the most notable office buildings in Sydney, Melbourne & Brisbane.

The Fifth Estate news website put the GPT decision in context: Other portfolio fund managers have set a range of dates to eliminate emissions, but this is the earliest target.

GPT also manages the $A4.9 billion GPT Wholesale Shopping Centre Fund.

Link: The Fifth Estate, 11 September 2018: The race is on: GPT flags net zero by 2020

Singaporean media-based company buys UK student accommodation portfolio

Unite Group plc, the UK’s leading manager & developer of student accommodation, said on Monday it had unconditionally exchanged contracts to sell 14 buildings to Singapore Press Holdings Ltd for £180.5 million, of which Unite’s share is £84.7 million.

10 of the properties are freehold, the other 4 leasehold.

The price reflects a net initial yield of 6.3% and is marginally below book value. Settlement is scheduled for this month.

The portfolio, comprising 3436 beds, is a combination of properties in Plymouth, Huddersfield, Sheffield, Birmingham, Bristol & London which are wholly owned by either of 2 funds. The sale means Unite will no longer have a presence in Plymouth or Huddersfield, but it said the efficiency & quality of its remaining portfolio had been enhanced.

Unite Students chief executive Richard Smith said the transaction was in line with Unite’s strategy to recycle capital through the disposal of assets with lower than average growth prospects, and reinvest into developments increasingly focusing on high- & mid-ranked universities, which have the best long-term growth prospects.

The group’s pro forma loan:value ratio will fall to 25% following the sale, providing capacity for the group to add further developments or university partnerships to its pipeline, while high & mid-ranked universities will account for 90% of the remaining portfolio.

Unite Students, founded in 1992, was the UK’s first private provider of purpose-built student accommodation.

Singapore Press Holdings chief executive Ng Yat Chung said: “The rising demand for purpose-built student accommodation is driven by an increase in first-year, international & postgraduate students enrolling for higher education in the UK. At the same time, in England, a record 27.9% of the 18-year-old population have been accepted for higher education this year, with enrolment projected to grow by 23% by 2030”.

It will boost our real estate asset management portfolio, establish us as an overseas owner of purpose-built student accommodation in the UK, and allow us to pursue other growth opportunities in this sector.”

Unite Students
Singapore Press Holdings

Attribution: GPT, The Fifth Estate, Unite Students, Singapore Press Holdings

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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Goodman Group holds course to lift profit 9%

ASX-listed industrial property specialist Goodman Group lifted its operating profit for the June year by 9% to $A845.9 million, and lifted operating earnings/share by 8.3% to A46.7c.

Goodman Group owns the NZX-listed Goodman Property Trust’s management company and is the cornerstone investor in the trust.

The Sydney-based group said in its announcement on Friday its statutory profit was up 41.1% to $A1.1 billion (A778 million).

Its forecasts for the 2019 financial year are for a 7.9% increase in operating profit to $A913 million and 7.1% increase in operating earnings/share to A50c.

The group has also increased its development work in progress, reduced its gearing and substantially increased its weighted average debt maturity.

Group chief executive Greg Goodman said: “This positive result reaffirms our long-term strategy to own, develop & manage high quality industrial properties in gateway cities around the world.

“The portfolio performance continued to be the key driver of the operational result, with property fundamentals steadily improving in the 2018 financial year. By having the right properties in the right locations to meet our customers’ needs, we have achieved like-for-like net property income growth of 3.2% & 98% occupancy across the portfolio, contributing to an increase in global valuations of $A2.8 billion.

“Our partnerships are continuing to deliver strong results, achieving an average total return of 15% for the year. External assets under management are also up 15% to $A35.1 billion, with total assets under management of $A38.3 billion, up 11%. Revaluations & net investment, predominantly through our development activity, will support further growth.”

Mr Goodman said advances in technology, the growth of e-commerce, changes in consumer behaviour & modernisation of supply chains remained significant drivers of customer demand globally.

“This continues to have a positive impact on our development workbook, with work in progress increasing to $3.6 billion. Having land in key locations is critical to providing the opportunity & flexibility for our customers to have modern facilities developed in a manner that is both timely & meets their own customer service standards. Goodman’s global development pipeline of over $A10 billion is concentrated in key markets and is designed to cater to that demand.

“Intensification of land use & competition for scarce sites from residential, e-commerce & data centres in urban locations continues to drive rents & land prices upwards. We will maintain our disciplined approach to investment, while being proactive with our customers in providing flexible solutions to cater to these changing market conditions.”

Financial highlights:

  • Operating profit, up 9% to $A845.9 million ($A776 million)
  • Operating earnings/share, up 8.3% to A46.7c (A43.1c)
  • Total distribution, up 8.1% to A28.0c/stapled security (A25.9c)
  • Net tangible assets/security, up 10% to $A4.64 ($A4.206)
  • Statutory profit, up 41.1% to $A1.1 billion ($A778.1 million)
  • Gearing, down 13.6% by strong cashflows to 5.1% (5.9%), lookthrough gearing at 16.3% & interest cover ratio of 16.2 times (9.5 times)
  • Weighted average debt maturity, 6.9 years (3.7 years)
  • Liability management exercises have lowered weighted average cost of debt to 2.4%, with $A3.4 billion of liquidity available at 30 June, predominantly in cash.

Operational highlights:

  • Total assets under management, up 10.7% to $A38.3 billion ($A34.6 billion)
  • External assets under management, up 15.1% to $A35.1 billion ($A30.5 billion), driven by valuation increases and development completions
  • Valuation uplift of $A2.8 billion across the group & partnerships
  • Continued strength in property fundamentals resulting in occupancy at 98%, weighted average lease expiry of 4.8 years, net property income growth of 3.2%
  • Development work in progress, up 2.9% to $A3.6 billion ($A3.5 billion) across 80 projects in 12 countries with a forecast yield on cost of 7.2%
  • Partnership average total return, 15%

The group had $A3.4 billion in cash & available lines of credit at 30 June, while the partnerships had $A12.1 billion of liquidity available to participate in future growth opportunities.

Full detail

Attribution: Company release.

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Greenland & Golden Horse start 1400-apartment job on old Goodman industrial site

Chinese state-owned developer Greenland Group & Golden Horse Group of Hong Kong turned the first sod on Thursday for a 6.9ha 1400-apartment joint-venture project at Erskineville in Sydney’s inner-west, on a former industrial site which Goodman Group sold to Golden Horse in 2014.

Construction partner for stage 1 of the Park Sydney development is local family-owned builder Richard Crookes Constructions Pty Ltd, which has worked on several Greenland projects.

Image above: Park Sydney masterplan, highlighting amenities.

The masterplanned residential community will be developed in 5 stages and will ultimately feature 9 development blocks ranging in height from 2-8 storeys.

Park Sydney, 4km from Sydney’s cbd, will have a 7446m² public park, a supermarket & specialty shops, a fresh food precinct, eat street, medical centre & childcare centre.

Greenland Australia managing director Sherwood Luo said: “Together with Golden Horse Australia, we’ve been planning Park Sydney since 2016, so it’s particularly exciting to see major projects of this scale starting to take shape and watching how they transform the local area.

“We are converting this large former industrial precinct into an engaging & inclusive residential community that will ultimately become home to some 3000 residents.”

The value to Goodman of its exit

Golden Horse Group expanded into Australia in 2013 and bought the former industrial site in Erskineville from Goodman Group the next year. For Goodman (owner of NZX-listed Goodman Property Trust’s management company & cornerstone investor in the trust), that deal was among many as the group sold $A1.9 billion of mostly industrial assets in a year, and reinvested the lot to generate higher development returns.

Builder with long list of staff support programmes

On a different tack, the builder on this project has a lot to say about how it treats its staff – an eye-opener at a time the New Zealand construction sector has been grumbling about contract arrangements, and this government (like the last one) is talking about increasing training for & numbers in the construction industry.

Richard Crookes Constructions says on its careers page: “RCC believes the success of every project depends on the ability of their personnel and the synergy of the project teams… RCC’s business is based on maintaining long-term relationships with clients, partners & subcontractors.”

It also lists a number of staff-supporting views that I’m sure would be novelties if espoused in New Zealand:

  • We build a talent pipeline
  • We expect our staff to engage in the business and be part of its success, growth & evolution. In return we invest in their growth & development. We give people autonomy, support & the resources they need to perform at their best
  • We maintain a flat management structure with an open door policy and an honest & collaborative culture
  • Fitness passport gives individuals & families access to multiple facilities (gyms, swimming pools) which allows you to go as often as you like
  • Exercise incentives, health assessments, mindfit programme, access to trainers, $A100 annual rebate & annual flu vaccinations
  • RCC offers corporate rates with BUPA to all employees in an effort to encourage healthy lifestyles
  • Every employee receives one day off every 6 months – employees are encouraged to use the leave for engaging in health & wellbeing activities, spending time with family & friends or to relax
  • Each employee has the ability to purchase an additional 2 weeks of annual leave/year
  • Maternity & paternity leave is offered when members of the RCC family start or expand their own families
  • We would like your salary to work as hard as possible; for this reason, we offer salary packaging options such as novated leases (a lease arrangement, usually for a vehicle, where the employer takes on the obligations of the lessee to the financier, which ceases if the employee leaves the job)
  • Our staff can access a range of discounts from partnering retailers
  • RCC has a financial advisor in-house who is available to meet with staff one on one
  • We believe in & support females at RCC; one of the programme offerings is our women’s leadership lunch & learns
  • We offer an array of learning & development for our employees through coaching sessions, formal mentoring programmes, external training, role-specific technical training & leadership development programmes across all levels.

Park Sydney
Greenland Australia
Golden Horse Australia
Richard Crookes Constructions

Earlier story:
17 August 2015: Urban renewal lifts Goodman Group

Attribution: Joint venture release, Greenland, Golden Horse & Richard Crookes websites.

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Goodman Group sets up Brazilian logistics investment partnership

ASX-listed Goodman Group, which manages the Goodman Property Trust in New Zealand, has established a $US700 million ($NZ1 billion) Brazilian logistics partnership to invest in Sao Paulo & Rio de Janeiro.

One of those projects is Goodman’s proposed 27,000m² flagship development 20km from São Paulo, provisionally named ABCD1 (pictured), near 2 highways & the Mario Covas ring road, providing easy access to Santos Port, the largest port in Latin America.

Goodman Brazil chief executive Cesar Nasser said on Wednesday the Goodman Brazil Logistics Partnership would invest in prime logistics & industrial assets in the 2 gateway cities, starting with a $US250 million investment in existing assets & work in progress.

He said the partnership would allow Goodman to invest alongside its global capital partners, the Dutch pension funds manager APG Group NV, the Canada Pension Plan Investment Board, First State Super of Australia and the Singaporean sovereign wealth fund GIC Pte Ltd, who shared the same investment horizon & confidence in the Brazilian market.

“The partnership has been established with about $US270 million (1 billion real, $NZ390 million) of existing assets & work in progress that can be developed to deliver over 1 million m² of high quality logistics space. With the Brazilian market experiencing under-supply of modern, high quality space, we have an opportunity to expand our global platform in Brazil for the benefit of our customers.”

Goodman Group entered the Brazilian property market in 2012, owning, developing & managing modern high quality logistics & industrial properties.

The group has built up a $US28.3 billion global operating platform of 375 properties in 16 countries. It has 17.3 million m² under management.

APG Group
Canada Pension Plan Investment Board (CPPIB)
First State Super

Attribution: Company release.

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2 new Blackstone funds have $US9.4 billion to invest in Asia

US fund manager Blackstone Group LP closed investment in 2 Asian funds this week – its first Asian private equity fund, Blackstone Capital Partners Asia, on Tuesday, and its second Asian opportunistic real estate fund, Blackstone Real Estate Partners Asia II, on Wednesday.

At $US2.3 billion, the private equity fund is comparatively small – the real estate fund has $US7.1 billion of capital commitments. But the whole of Blackstone’s private equity business has $US111 billion of assets under management.

Coupled with associated commitments from its global buyout fund, Blackstone’s capital partners fund has a minimum of $US3.8 billion of equity to invest in Asia.

Blackstone’s global head of private equity, Joe Baratta, said: “The region continues to experience strong growth compared to other major markets, presenting compelling investment opportunities across sectors.”

Blackstone Real Estate global co-head Ken Caplan said the real estate fund was the largest it had ever dedicated to real estate investing in Asia. He said it gave Blackstone flexibility to pursue a range of opportunities and commit capital with speed & scale.

Blackstone’s real estate business has about $US120 billion in investor capital under management. Its portfolio includes hotel, office, retail, industrial & residential properties in the US, Europe, Asia & Latin America. It also operates a real estate finance platform, including management of the publicly traded Blackstone Mortgage Trust.

Link: Blackstone Group

Earlier stories:
18 May 2018: Goodman & Singapore fund sell VXV portfolio to Blackstone
2 February 2018: Blackstone’s Arena Living buys Mt Eden Gardens
17 February 2016: Blackstone buys Lendlease’s NZ retirement villages

Attribution: Company releases.

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Unibail-Rodamco completes Westfield deal

Unibail-Rodamco SE completed the acquisition of Westfield Corp Ltd at the end of last week to create an owner of 102 shopping centres in 13 countries – including some offices & convention spaces, a €62 billion ($NZ104 billion) portfolio.

It doesn’t include the former Westfield mall assets in Australia & New Zealand, moved to the Scentre Group in 2014.

The enlarged mall-owning entity based in Amsterdam & Paris, Unibail-Rodamco-Westfield, describes itself as “the premier global developer & operator of flagship shopping destinations”.

88% of its portfolio is in retail, 7% in offices and 6% in convention & exhibition venues. 56 of its malls are flagships in Europe & the US.


Earlier stories:

25 May 2018: One last step for UnibailRodamco takeover of Westfield
13 December 2017: Unibail-Rodamco strikes deal to buy Westfield

Attribution: Company release.

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