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Fletcher & Goodman sign up for new Wynyard Quarter building

on Friday 27 March 2015 in CBD, Fletcher Building, Gainz, Goodman Group, Goodman Property Trust, Neighbourhoods, Sectors, Securities – NZ, Securities – overseas, Wynyard Quarter

Fletcher Building Ltd subsidiary Fletcher Construction has entered into a conditional agreement to build a 7-storey office building in the Wynyard Quarter which it will sell to the joint venture between Goodman Property Trust & Singapore sovereign wealth fund GIC, Wynyard Precinct Holdings, for $86.2 million.

The 16,735m² building on the corner of Gaunt & Daldy Sts, next to the linear park that will link Victoria Park to the Wynyard Quarter, will have a retail ground floor, 6 office levels & 152 parking spaces. It’s been substantially leased to IT service provider Datacom. 15,328 m² will be commercial, 1407 m² retail. Datacom has committed to a 15-year lease on 5 floors, representing 80% of the total rentable area.

It’s been designed to a 5 star green star certified rating standard and is scheduled for completion in March 2017.

Goodman (NZ) Ltd chief executive John Dakin the acquisition was expected to provide a yield on cost of around 8.5% once fully leased & income producing. The estimated value, once fully leased, was forecast to be $90 million.

Goodman Property Trust will also finance the construction by way of a funding arrangement with Fletcher Building, to be repaid on settlement of the completed building.

Mr Dakin said no fees would be paid to Goodman Group by the joint venture or Goodman Property Trust as part of the purchase. However, Fletcher Building has separately engaged Goodman Group to provide development management services on the project.

Earlier stories:
30 January 2015: Goodman’s GIC deal gets regulatory approval
16 November 2014: Mixed Goodman trust result moves focus to GIC
7 November 2014: GIC buys into Goodman waterfront partnership

Attribution: Company releases.

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World property Sat22Nov14 – Sheraton Sydney sells, LM founder Drake in gun, Top world shop rents, 33% more equity for Goodman China venture, Hermes of UK in 2 ventures

on Saturday 22 November 2014 in Gainz, Goodman Group, Hospitality, Market, Sectors, Securities – overseas, Starwood, World property

Chinese insurer buys Sheraton in Sydney
ASIC applies to ban LM founder Peter Drake
Fifth Avenue rents soar above $NZ46,000/m², Sydney mall jumps 25%
Goodman & Canadian fund lift China investment to $US2 billion
Hermes creates UK venture with Canadian fund, US venture with Lionstone

Chinese insurer buys Sheraton in Sydney

Starwood Hotels & Resorts Worldwide Inc has sold the 557-room Sheraton on the Park hotel in Sydney (above) to Sunshine Insurance Group Corp Ltd of China for $A463 million. Starwood will continue to operate the hotel as a Sheraton under a long-term management contract.

Starwood has built a portfolio of owned, operated & managed hotels and runs 1200 properties in 100 countries, but has sold $US1.5 billion of hotels in the last 3 years. It put this hotel on the market in May. The buyer, Sunshine, was launched in Beijing 10 years ago.

ASIC applies to ban LM founder Peter Drake

ASIC (the Australian Securities & Investments Commission) goes to court in Brisbane on Tuesday seeking financial penalties & banning orders against LM Investment Management Ltd founder Peter Drake & former directors.

Mr Drake, a New Zealander, founded the Gold Coast-based LM in 1993 and built it up to hold $A800 million on behalf of 12,000 investors, including $120 million invested by New Zealanders.

ASIC alleges Mr Drake used his position to gain an advantage for himself, and the former directors breached their directors’ duties by failing to act with the proper degree of care & diligence regarding transactions involving the LM Managed Performance Fund.

LM froze redemptions in 2009 and called in administrators in March 2013. Between those times, the LM loan limit for a Gold Coast developer Mr Drake was sole director & beneficial owner of, Maddison Estate Pty Ltd, rose from $A40 million to $A280 million. The company built nothing, had no subdivision plans registered and sold no housing lots.

Mr Drake’s assets were frozen & his passport seized last year.

Links: ASIC takes civil action against LM founder & former directors
ASIC dedicated LMIM webpage
When an investment fund goes bad

Fifth Avenue rents soar above $NZ46,000/m², Sydney mall jumps 25%

International real estate agency Cushman & Wakefield said on Wednesday New York’s Upper Fifth Avenue had become the world’s most expensive shopping destination this year when rents rose 13.3% in local currency to $US3500/ft²/year (€29,822 or $NZ46,852/m²).

Fifth Avenue took over from Causeway Bay in Hong Kong, where rents slipped 6.8% to $NZ36,617/m². The Pitt St Mall in Sydney jumped 25% & 3 places to become fifth most expensive at $NZ13,602/m².

Goodman & Canadian fund lift China investment to $US2 billion

Goodman Group and the Canada Pension Plan Investment Board said on Thursday they’d add $US500 million more in equity to their Goodman China Logistics Holding joint venture, as investors continued to be encouraged by the returns the sector.

The Canadian fund’s contribution is $US400 million, Goodman’s $US100 million, taking the joint venture from US300 million when they started in 5 years ago to $US2 billion.

Hermes creates UK venture with Canadian fund, US venture with Lionstone

The masterplan for Wellington Place in Leeds.

The masterplan for Wellington Place in Leeds.

The Canada Pension Plan Investment Board formed a UK regional joint venture with Hermes Real Estate this month, starting by splitting ownership of the development phase of Wellington Place in Leeds.

Developer MEPC plc has a masterplan for 140,000m² of commercial, retail, leisure & residential buildings in a campus-style development of 14 buildings.

Hermes manages total assets of £27.9 billion. The Canadian fund has $C234.4 billion under management, of which $C25.4 billion is in real estate.

2 days before that deal, Hermes announced a joint venture with privately owned Houston-based investor Lionstone Investments, starting with $US250 million of equity commitments to a fund which will invest primarily in office properties in high-growth US markets.

Links: Hermes Investment Management
Canada Pension Plan Investment Board
MEPC
Lionstone Investments

Attribution: Starwood, ASIC, Cushman Wakefield, Goodman Group, Hermes, MEPC

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

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World property Sun16Nov14 – New Covent Garden redevelopment, Goodman at Eastside Locks

on Sunday 16 November 2014 in Gainz, Goodman Group, Market, Neighbourhoods, Overseas, Sectors, Securities – overseas, UK, World property

£2 billion New Covent Garden redevelopment gets consent
Goodman starts construction in Birmingham regeneration precinct Eastside Locks

£2 billion New Covent Garden redevelopment gets consent

The Vinci St Modwen joint venture and the Covent Garden Market Authority were granted consent on Wednesday for the 10-year £2 billion redevelopment of the historic New Covent Garden market in south London.

The project includes about 47,000m² of new market facilities on 15ha of the site in Nine Elms. The other 8ha are to be transformed into 3 high quality residential neighbourhoods containing 3000 new homes, 12,500m² of offices and 9300m² of shops, cafés, restaurants & community facilities.

Vinci St Modwen is a 50/50 joint venture between St Modwen Properties plc & Vinci plc.

Goodman starts construction in Birmingham regeneration precinct Eastside Locks

Goodman Group began construction last week of a 5100m² 4-storey office building in Birmingham regeneration quarter Eastside Locks – the first new office building in the quarter and first speculative office building in Birmingham since 2007.

The whole of Eastside Locks – a precinct intended for business, learning, leisure, technology & creative industries – got planning consent in 2008. Birmingham City University began construction of the first phase of its city-centre campus at Eastside’s Millennium Point in 2011 and got consent for the second phase in 2012.

The UK Government has designated part of Eastside Locks as an enterprise zone to promote economic growth, supported by the Greater Birmingham & Solihull Local Enterprise Partnership. The Goodman building at 1 Cardigan St, due for completion in 2016, is beside the proposed new HS2 (High Speed 2) station and is in the first phase of up to 75,000m² of offices in a landscaped & managed environment alongside the Digbeth branch of the Birmingham & Fazeley Canal.

Birmingham is trying to head in a similar direction to Auckland – it has an ambition to become one of the top 20 most liveable cities in the world.

Links: Goodman Group, full Eastside Locks release
Millennium Point
Millennium Point, Eastside

Attribution: Goodman, Millennium Point, Vinci St Modwen, Covent Garden Authority.

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

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Goodman Group buys another Wynyard development block

on Friday 7 November 2014 in CBD, Gainz, Goodman Group, Neighbourhoods, Sectors, Securities – overseas, Wynyard Quarter

Published 5 November 2014
Goodman Group has bought another Wynyard Quarter parcel from Viaduct Harbour Holdings Ltd – 9793m² behind the Air NZ building – for $40.1 million.

Viaduct Harbour Holdings describes the 8a of privately held land along the Fanshawe St edge of the Wynyard Quarter as the Viaduct Quarter, seeing it as an extension of the successful Viaduct precinct nearer the cbd.

The land in this deal comprises an entire block bounded by Beaumont St, Gaunt St, Daldy St & Pakenham St West, and has concept plans showing 4 mixed-use buildings of more than 45,000m² could be built on the site.

Colliers International corporate & institutional sales director John Green, who marketed the property with colleagues Peter Herdson & Andrew Reed, said: “The transaction follows a 5-week marketing campaign that generated considerable interest from local & international developers & investors. The sale price represents $4095/m², with the top 3 offers all being within $1 million of each other.”

Viaduct Harbour Holdings’ property general manager, Paul Gunn, said: “Despite its offer not being the highest, we decided to transact with Goodman taking into account its track record of successful & high quality developments. The price paid reflects the strength of demand for land in & around the Viaduct, with this site being located in one of the most popular development locations in Auckland.”

Sydney-based Goodman Group is the developer, with Fletcher Building Ltd, of the new Fonterra building nearby. That building has been sold to NZX-listed Goodman Property Trust, which in turn has put it into a joint venture this week with Singaporean sovereign wealth fund GIC. Goodman Group subsidiary Goodman (NZ) Ltd manages the Goodman trust.

Mr Herdson said the large site size was particularly attractive as it presented the opportunity to undertake a masterplanned integrated development, with combined common areas leveraging value & amenity across multiple building sites. “The overwhelming level of interest in the site demonstrates the appetite that exists in the market for larger development opportunities on & around our waterfront.

“This level of land value reflects the premium nature of the Viaduct & Wynyard Quarter, particularly with the quality national & international tenants in the surrounding area, and demonstrates the strong demand from tenants to be located in this area.

“Construction is already well underway on the new headquarters for Fonterra and the neighbouring VXV3 building, with further significant developments expected to be announced very soon. These new buildings join the existing headquarters for major corporates including Air NZ, Vodafone, KPMG, Microsoft & HP (all in buildings owned by the new joint venture between Goodman Property Trust & Singaporean sovereign wealth fund GIC).

“In fact, demand is only growing stronger. We had subsequent inquiry at $4600/m², and if we had another site to sell today we believe we would get upwards of $5000/m². This is consistent with the ongoing strong growth we are seeing in the market – and in particular over the last year.”

The property was subject to 3 leases, all short-term or including demolition clauses. Viaduct Harbour Holdings had secured resource consent to demolish the old buildings, so the property was sold ready for development.

Earlier story:
3 November 2014: GIC buys into Goodman waterfront partnership

Attribution: Company release.

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GIC buys into Goodman waterfront partnership

on Friday 7 November 2014 in CBD, Gainz, Goodman Group, Goodman Property Trust, Neighbourhoods, Sectors, Securities – NZ, Securities – overseas, Wynyard Quarter

Published 3 November 2014
Singapore’s sovereign wealth fund, GIC, has joined Goodman Property Trust in a restructured & expanded waterfront investment joint venture. It’s GIC’s first real estate investment in New Zealand.

Their joint venture, which includes Goodman’s existing $313 million of Viaduct property interests, has a mandate to grow to $500 million.

The NZX-listed Goodman trust already had a 50:50 $156.2 million joint venture, Viaduct Corporate Centre Ltd, with the developers of the Vodafone, KPMG & Microsoft/HP office buildings between Fanshawe St & Viaduct Harbour Avenue.

The developers (originally Allan Fraser & Tim Dromgool, but the interests have changed) will sell out of the joint venture company, GIC will buy into it and the stakes adjusted to 51:49. The same split will be applied to all future investments.

Goodman will also sell the Air NZ Building and the Fonterra Building (under construction), further along Fanshawe St, into the joint venture. The initial transaction remains subject to certain conditions, including Overseas Investment Office approval.

Trust manager Goodman (NZ) Ltd chairman Keith Smith said: “The benefits of Goodman Property Trust’s close relationship with Goodman Group, one of the world’s largest integrated property groups, have facilitated the introduction of GIC into the New Zealand market and a broadening of the trust’s investment strategy in the Viaduct.”

Goodman Group had a 5-year joint venture with another Singapore Government-controlled company, Ascendas Pte Ltd, the Singapore-focused A-Reit & its management company, which ended in 2008 when Goodman moved on to separate Asian ventures, notably a large & growing logistics property business in China.

Goodman Group chief executive Greg Goodman said he looked forward to extending the group’s involvement in the regeneration of the quarter. Goodman Group is developing the Fonterra Building with Fletcher Building Ltd, and also owns the Goodman trust’s manager.

GIC Real Estate president Goh Kok Huat said: “As a long-term investor, GIC looks to establish strategic partnerships with leading market players. Goodman has strong asset management expertise and has a good pulse on the New Zealand market. We believe there will be good investment opportunities that allow the joint venture to grow further, particularly in the Viaduct Quarter.”

Goodman has identified its portfolio’s location as the Viaduct Quarter, running from the outer edge of the Viaduct precinct, along the back of the Lighter Basin and continuing across Halsey & Daldy Sts, on the Fanshawe St frontage of the Wynyard Quarter, to the Air NZ Building between Daldy & Beaumont Sts.

Goodman (NZ) chief executive John Dakin said the group had set its investment strategy in the area over 8 years ago: “The Viaduct Quarter is a proven investment location that presents exciting new opportunities, with local government initiatives & private development transforming the former marine & industrial areas into a world-class, mixed-use waterfront precinct.”

After identifying the quarter as a strategic investment location, the trust acquired the Air NZ building & 50% interest in Viaduct Corporate Centre in 2006.

“The investment strategy of the new partnership will continue this commercial focus, building a portfolio of high quality, campus-style office properties, leased to major customers on long-term leases.

“Through its relationship with Goodman Group, the joint venture has options to purchase future office developments in the Viaduct Quarter and, subject to meeting strict investment hurdles, it is anticipated that the partnership’s property portfolio could grow to $500 million over time.”

Mr Dakin said the Goodman trust expected the new partnership to provide a range of benefits for it, including capacity to reinvest in a growing market segment, access to new office stock in a progressive location, increased asset & customer diversity and a greater mix of ownership tenures in an expanded portfolio.

“The introduction of a like-minded partner gives Goodman Property Trust the capacity to expand its investment in the Viaduct Quarter, enhancing the overall portfolio, without the requirement for any significant new funding.”

The trust will reduce its gearing as a result of the initial transaction and has reaffirmed its distributable earnings guidance for the 2015 financial year of 9.1c/unit before tax. Forecast cash distributions of 6.45c/unit are also unchanged.

GIC is a leading global investment company with well over $US100 billion in assets under management. Established in 1981, it manages Singapore’s foreign reserves, has investments in over 40 countries and has been investing in emerging markets for more than 2 decades.

Image above: Goodman’s Viaduct Quarter, from the trust’s website; the Fonterra building is now up to 4 storeys.

Link: GIC

Earlier stories:
24 January 2014: World property F24Jan14 – GIC buys in New York & London
14 March 2008: Goodman sells out of Singapore joint venture

Attribution: Company release.

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World property W2July14 – Frasers goes ahead with Australand bid, Goodman increases German portfolio

on Wednesday 2 July 2014 in Frasers, Gainz, Goodman Group, Market, Sectors, Securities – overseas, World property

Frasers Centrepoint lodges full Australand takeover offer

Singapore-listed Frasers Centrepoint Ltd, controlled by Thai billionaire Charoen Sirivadhanabhakdi, looked to have control of Australand Property Group yesterday, 4 weeks after trumping Stockland Property Group’s “increased & final” offer for the ASX-listed residential& commercial developer.

Stockland bought 19% of Australand in March, when another Singaporean property company, CapitaLand Ltd, sold the remaining 39% of its original 59% stake. Stockland went on to a full takeover bid which rose to a value of $A4.55. Frasers entered the picture on 4 June with an offer worth $A4.48 before various extras. The values of the 2 bids were complicated by the changing values of scrip components.

Frasers Centrepoint has had an exclusive due diligence period since 4 June, and yesterday entered a bid implementation agreement for an off-market cash takeover offer of $A4.48/stapled security. In addition, Australand securityholders will get a pro rata share of the company’s A12.75c/security second-half distribution up to the earlier of Frasers going unconditional or the end of this year. That’s worth about 2.1c/security/month more.

The bid values Australand at about $A2.6 billion.

Earlier story, World property F6June14 – Goodman starts US rollout, Australand bidding war

Goodman continues German expansion

Goodman Group’s Goodman European Logistics Fund has acquired 2 properties in Germany totalling 112,000m² from Union Investment Real Estate GmbH – a 53,000m² facility in Mönchengladbach’s Regiopark and a 59,000m² facility in Muggensturm, in the Karlsruhe area.

Goodman didn’t state the price of the acquisitions, but said it now had 2.7 million m² of assets worth €1.56 billion under management in Germany.

Goodman is also expanding a design-build development next to the Regiopark site from 78,000m² to 134,000m². It’s leased to German online fashion retailer Zalando.

Attribution: Australand, Goodman

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

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World property Sn22June14 – Goodman HK issue popular, Future Fund partners Dexus, international insights

on Sunday 22 June 2014 in Deutsche Bank, Gainz, Goodman Group, Market, Sectors, Securities – overseas, World property

First $US400 million of Goodman HK note programme heavily oversubscribed
Dexus takes Future Fund into Greystanes industrial partnership
Some insights into the big bad world….

First $US400 million of Goodman HK note programme heavily oversubscribed

Goodman Group’s Goodman HK Finance Ltd gave notice on 4 June that it applied to list a $US2 billion euro medium-term note programme for the Goodman Hong Kong Logistics Fund on the Hong Kong Stock Exchange, and said last week the first $US400 million offer of 4.375% 10-year guaranteed notes was 4.5 times oversubscribed by institutional investors.

At 31 March, the fund had a $HK19.2 billion ($NZ2.85 billion) portfolio. Goodman’s greater China managing director, Philip Pearce, said the new money would be used to repay existing debt facilities, in line with its strategy of extending debt maturities and diversifying funding sources.

Dexus takes Future Fund into Greystanes industrial partnership

Dexus Property Group said on Thursday it had established a 50:50 industrial property capital partnership with Australian sovereign wealth fund, the Future Fund. The partnership transaction is scheduled to settle next Thursday, 26 June.

The first investment of the Dexus Industrial Partnership will be the Quarrywest at Greystanes industrial development site in Sydney’s outer-west. The 25.6ha site is across Reconciliation Rd from another ex-quarry site where Dexus sold 50% of 17 properties into another partnership last year.

The whole of the former Prospect quarry, now being turned into industrial land, is a few minutes from the interchange of Sydney’s M4 & M7 motorways.

The partnership has exercised a call option to acquire land off-market from quarry owner Boral Ltd for $A50.5 million and a contract will be entered into with Boral to undertake landform works. Dexus said the partnership intended to progressively develop new facilities on a pre-lease or speculative basis over 3 years, starting July 2016.

The Future Fund’s portfolio was valued at $A98 billion at 31 March. $A5.14 billion (5.3%) of it is in real estate.

Some insights into the big bad world….

If you feel like frightening yourself – or becoming at least slightly more informed about world events that impact on life right down to where you live – take this little tour…

On a Twitter catchup this afternoon, I stopped at a link posted by transport.blog’s Patrick Reynolds to an article in the Yemen Times, previously appearing in The Spectator, by Douglas Murray, associate director of the Henry Jackson Society and an author, most recently of Islamophilia, who also founded the Centre for Social Cohesion, which monitors extremism in Britain. He wrote, on the Mid-East conflicts, that “certain themes are emerging”.

Next stop, the Henry Jackson Society. Who? This society is a UK thinktank named after a US senator who died in 1983 (a link to him is below). The sixth of its 8 principles is that it “believes that only modern liberal democratic states are truly legitimate” – and it will support the fight to sustain democracy & capitalism.

On my stop at the Henry Jackson Society, I read 2 articles by Dr Andrew Foxall (originally published in Forbes) on the wars Russia was already deep in well before the Ukraine, which related to Russia as a nation and to its nationalist, geographic, ethnic & religious conflicts.

Along the way I also stopped at the Texan geopolitical intelligence firm Stratfor’s website, for another eye on the Mid-East conflicts.

It’s worth remembering, I figure as we head into the last 3 months before an election in this tame backwater, what havoc these international events might wreak and who among our leaders might understand how to deal with a greatly changed, unpredictable future.

And now, for me, back to the local havoc – of determination to increase congestion, of the continuing failure to address not just affordability of housing but the stripping out of multi-millions of investment dollars through bad or non-existent policy – and the brighter lights of more frequent commercial property transactions….

Links: Transportblog
Why the great Sunni-Shia conflict is getting ever closer to the surface
Who was Henry Jackson?
HJS, The conflict in the Middle East is far bigger than ISIS & Al Quaeda
Beyond Ukraine, Russia is already at war
The intrigue lying behind Iraq’s jihadist uprising

Attribution: Goodman, Dexus, multiple sources above

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

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World property F6June14 – Goodman starts US rollout, Australand bidding war

on Friday 6 June 2014 in Frasers, Gainz, Goodman Group, Sectors, Securities – overseas

Goodman starts $US1.4 billion US rollout
Bidding for Australand gets complicated

Goodman starts $US1.4 billion US rollout

After 2 years securing sites around the US, ASX-listed Goodman Group’s North American subsidiary, Goodman Birtcher, has started the rollout of a 1.4 million m², $US1.4 billion development pipeline in 8 logistics markets over the next 3 years.

First up is a $US150 million 148,000m² logistics centre at Rancho Cucamonga, about 70km from Los Angeles into the hills of Southern California’s Inland Empire.

Goodman Group chief executive Greg Goodman said yesterday: “Our focus over the past 2 years has been to assemble a high quality portfolio of class A sites in our target locations, and we are now ready to commence the rollout of a significant development programme, at a time when key US investment demand drivers are recovering and the supply of high quality, big box warehouse space remains limited.”

Goodman has a $US24.5 billion portfolio of assets under management and $US2.5 billion of development under way globally.

Bidding for Australand gets complicated

Stockland Property Group issued its “increased & final” offer for Australand Property Group on 28 May, and learned on Wednesday it had been trumped by a new Singaporean bidder, Frasers Centrepoint Ltd.

Then the bid values got complicated: Australand’s share price shot up A38c to $A4.58, A2.75c short of Fraser’s all-up bid value. Stockland’s share price also shot up, going over $A4 before settling back to $A3.97. The immediate effect was that Stockland’s offer rose to a value of $A4.55, while Fraser’s offer before various extras was at $A4.48.

Both bids are worth about $A2.6 billion and are well above the level at which Singaporean property company CapitaLand Ltd exited its final 39% in March, $A3.75/security.

CapitaLand owned 59% of Australand until last November, when it sold 20%. Stockland entered the picture when CapitaLand sold the remaining 39%, buying 19%.

Frasers is now controlled by Thai billionaire Charoen Sirivadhanabhakdi.

Attribution: Goodman, Australand, Stockland

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

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World property M24Feb14 – More Melaka tourist islands, Goodman Japan expands

on Monday 24 February 2014 in Gainz, Goodman Group, Market, Sectors, Securities – overseas, World property

Melaka Gateway planned for new manmade islands
Goodman expands Japanese joint venture

Melaka Gateway planned for new manmade islands

The Malaysian Government intends to add a cluster of manmade islands to the first one developed off Melaka, on the south-east coast of the Malay Peninsula, creating a multi-purpose luxury tourism development 200km up the coast from Singapore.

Chief Minister Datuk Seri Idris Haron said the 246ha Melaka Gateway would be fully developed by 2023 at a cost of RM40 billion ($NZ14.5 billion) as part of the government’s strategy to attract the “global élite” of international tourists.

It will have 3 new manmade islands and feature villas, hotels, malls, restaurants, theme parks, a museum, recreational & sports centres, an international designer street, a sunset beach, an international cruise & ferry terminal, a marina, a beacon tower, a floating stadium, an “eco isle”. A Malaysia Eye, similar to the one in London, is under construction on the first man-made island, Pulau Melaka.

Engineering company Kejuruteraan Asas Jaya Sdn Bhd, which began building a RM100 million cruise ship terminal on land reclaimed for RM300 million at Melaka last year (for completion next year),  is undertaking the Melaka Gateway project, supported by investments from the United Arab Emirates, Hong Kong, China & the US.

Goodman expands Japanese joint venture

After announcing an 11% rise in its half-year profit a week ago, Goodman Group gave details of how it proposed to expand its already substantial Japanese business.

The Sydney-based Goodman and the Abu Dhabi Investment Council have agreed to increase their equity allocation to the Goodman Japan Development Partnership from $US500 million to $US800 million.

The partnership’s first project, Goodman Sakai, a 130,000m², high-spec logistics facility in Osaka Bay, was 100% pre-leased last October, 5 months ahead of construction completion, and is currently on track for completion this March.

The partnership has started construction of 3 more projects – Goodman Obu in Nagoya, and Goodman Mizue & Goodman Ichikawa in Tokyo Bay – and has secured several more prime inland development sites in Greater Tokyo through off-market transactions.

The $US100 million capital-raising by the unlisted Goodman Japan Core Fund, to partially fund the acquisition of Goodman Sakai, closed oversubscribed by existing investors. That grew the fund to $US900 million, and it will seek another $US200 million for new acquisitions.

Goodman Japan chief executive Paul McGarry said a key issue facing the group’s customers in Japan was rising rents, due to escalating construction costs, higher land prices & the short supply of labour. “In response to this, Goodman has secured several large land parcels for development in the Chiba prefecture of Greater Tokyo in a well connected, high growth corridor with a dense & young population base.”

Goodman expects to grow total assets under management in Japan organically to $US2.5 billion in the medium term.

Attribution: Goodman Group, Malasian Government release

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

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Goodman Group announces big Western China design-build as it posts 11% profit gain

on Monday 17 February 2014 in Gainz, Goodman Group, Sectors, Securities – overseas

Goodman Group lifted its half-year operating profit by 11% to $A296 million. As chief executive Greg Goodman was announcing that on Friday, the group demonstrated how active it is internationally, signing a 46,700m² design-build in Western China.

That agreement is with Yunda Express, one of the largest privately owned express delivery companies in China. Goodman’s Greater China managing director, Philip Pearce, said the Goodman Chongqing Airport Logistics Park would be Yunda Express’s regional packaging & distribution centre for Western China and Goodman’s largest development in the region.

Other key financial & operational highlights for the December half:

  • Statutory profit of $A160 million (including $A216 million of unrealised derivative & forex mark-to-market adjustments, offset by $A262 million of foreign currency translations recognised on the balance sheet but not through the income statement)
  • Operating earnings of A17.16c/security, up 6%
  • Distribution of A10.35c/stapled security, up 7%, in line with forecast full-year distribution of A20.7c
  • Balance sheet gearing maintained at 19.5% and interest coverage ratio of 5.9x
  • Group liquidity at $A1.9 billion, with weighted average debt maturity of 5.6 years
  • On track to deliver full-year operating earnings/security of A34.3c, up 6%
  • Total assets under management of A26 billion, up 11% on the June 2013 balance date
  • Occupancy maintained at 96%, weighted average lease expiry of 4.9 years
  • Development work in progress at $A2.6 billion across 63 projects, 71% pre-committed and 88% matched to third-party capital
  • $A2 billion of new committed third-party equity raised
  • Established new investment partnership with Malaysia’s Employees Provident Fund in Germany, with €500 million initial combined equity commitment
  • $A5.2 billion of uncalled equity & debt available for funds to participate in development opportunities from the group & broader market.

Mr Goodman said third-party assets under management rose 11% in 6 months to $A21.6 billion, achieved through development completions & a number of fund initiatives undertaken during the first half. These had been key drivers of management earnings, contributing 16% of operating ebit.

I’ve posted articles about many of the group’s developments – you can check them here: http://www.propbd.co.nz/category/sectors/gainz/securities-overseas/goodman-group/. But Mr Goodman has continued his different style of management in the group’s half-year presentation, going into some detail on the whys & wherefores of financial mechanisms and its partnerships globally. You can check the extra detail through the Goodman Group website’s investor centre.

Link: Goodman Group

Attribution: Company release.

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