Archive | Stockland

Published: 8 February 2005

Stockland Property Group increased net profit by 16.2% to $A255 million in the December half, before amortisation of the goodwill on its AMP Diversified Property Trust takeover, unrealised loss on financial instruments & capital profits on the sale of investment properties.

Earnings/security rose 5.3% to A19.8c, before non-operational items.

Net tangible assets reached $A5.2 billion, nta/security rose 6.1% from June to $A3.99.

Stockland gained $A242 million in revaluations, from a combination of strong rental growth & firming cap rates.

Total assets rose 14.5% from June to $A8.3 billion, including the acquisition of the Lensworth portfolio in December for $A846 million.

Managing director Matthew Quinn said gearing was 27.5% at the 31 December balance date, within the 25-35% target range.

Stockland continues with its bid for the General Property Trust, which would create a property group with $A15 billion of assets. The offer has been extended to Friday 4 March.

The group presents full details of its property portfolio in an 83-page report which is on its website. Details include book values & rents across the portfolio, with costs, valuation dates, cap & discount rates for every property.

Stockland’s June 2004 valuation of its 50% of the Botany Town Centre in Auckland is $A12.4 million above cost, including additions. The book value is $A108.5 million, at $A4016/m², compared to the $A96.1 million cost. Capitalisation rate is 7.63%, discount rate 10.5%. Gross lettable area is 54,034m², annual sales $NZ201.1 million.

The New Zealand asset, developed by AMP Capital Investors NZ Ltd and still 50% owned by it, was part of a 3-property package in which a half-interest was sold in August 2002 to the AMP Diversified Property Trust, listed in Australia. Stockland then took over AMP Diversified. The other 2 properties in the package are the Lynmall Shopping Centre & Manukau Supa Centa

Website: Stockland

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Stockland Corp Ltd has found a buyer for the Miller St, North Sydney, building it will empty in 2007 when the tenant, Optus, moves to a new $A350 million Stockland office park at North Ryde.

Stockland announced Optus’ decision to move its headquarters to North Ryde once it got development approval in November, leaving the fate of the North Sydney building up in the air.

Abacus Property Group, having a growth spurt of its own, signed up to buy 50 Miller St for $A36.25 million, settling on Friday 17 December. Story: Abacus buys Optus office, Cairns hotel, establishes investment fund with Metcash

Optus’ new headquarters will have 84,000m² in 6 buildings

Australian telecommunications company Optus, owned by SingTel of Singapore, will move 6500 staff to a single campus headquarters in July 2007. The purpose-built campus, CentreCourt Estate in Macquarie Park, North Ryde, will be the largest of its kind in Australia. It will be spread across 8ha and offer 84,000m² of office space in 6 separate buildings.

Optus intends to spend up to $A150 million on fit-out over 2 years, but also expects to save up to $A20 million/year on rent.

The office park site will have retail facilities, a childcare centre, gym, foodcourt and parking for 2100 cars.

Stockland managing director Matthew Quinn said the group would consider launching an unlisted fund for a share of the ownership of the new Optus headquarters, following the success of its Stockland Direct Office Trust No1, which recently closed oversubscribed.

Stockland has entered into a fixed-time, fixed-term arrangement with Baulderstone Hornibrook to build the office park, designed by Rice Daubney.

Websites: Abacus Property Group

Stockland

Stockland Trust bought Foster’s Group Ltd’s Lensworth property development business on Thursday 9 December for $A846 million (including $A21million.working capital), making it the biggest residential developer in Australia.

Stockland took control of the AMP Diversified Property Trust, including interests in New Zealand commercial property assets, last year and has a bid for General Property Trust under way now. A bidder’s statement on the GPT bid, including some less rosy figures required by the Australian Takeovers Panel, will go out on Monday 13 December.

Stockland managing director Matthew Quinn said the Lensworth acquisition was consistent with Stockland’s strategy of strengthening its residential development business, with the aim of increasing market share, achieving economies of scale & growing profits.

He said Lensworth’s portfolio of 17 high-quality long-term projects, containing 29,600 lots with an end value exceeding $A7.6 billion, would complement the Stockland portfolio. “It consists primarily of large, master-planned urban community-based projects, with most properties located in key growth corridors currently targeted by Stockland. There is minimal crossover with Stockland’s existing land bank.

“The acquisition will provide Stockland with increased exposure to the south-east Queensland residential market, which is widely acknowledged as having strong long-term growth prospects.”

The combined portfolios would contain 66,000 lots in 96 residential & apartment projects containing with an $A15 billion end value.

Mr Quinn said the transaction would be entirely debt funded, and gearing on completion would be 31%.

He said Stockland had identified a number of development opportunities within the Lensworth portfolio which could generate significant annuity-style income through Stockland’s unlisted property funds business. Synergies would also arise through Stockland’s ability to leverage its existing infrastructure to manage the Lensworth portfolio.

Lensworth’s inventory had a book value of $A315 million at 30 June and its net asset value was $A201.3 million. It generated $A49.8 million ebita for the year from $A245.3 million revenue. Its 6600ha land bank included 3600ha of unzoned rural land, while the 3000ha zoned area had an estimated lot yield exceeding 22,000 dwellings.

During the 5-month due diligence process, the 3700ha Caloundra project was included in the South-east Queensland urban footprint, increasing its value significantly. It’s expected to yield 12,000 dwellings over 10 years, with development expected to start in 2012.

Website: Stockland

Stockland Trust filed its 138-page offer memorandum for the takeover of General Property Trust today.

The $A3.65/unit proposal, which follows defeat of Lend Lease Corp Ltd’s bid to merge with GPT, would create an $A15 billion listed property trust.

It would also mean the end to Lend Lease’s management of GPT.

Most recent earlier stories:

18 November 2004: Lend Lease merger with GPT blocked

9 November 2004: Stockland upsets the Lend Lease applecart

Stockland property group has closed the single-asset Stockland Direct Office Trust No 1’s $A66.5 million offer ahead of schedule after an overwhelming response from small investors since it opened on 14 September.

Stockland is a stapled security, combining a property investment trust & a management & development company. The unlisted funds business was established in January and Waterfront Place was its first offering.

The trust was launched on 14 September to buy a 50% interest in Waterfront Place in Brisbane. Stockland & Westpac Bank bought the property from AMP through a subsidiary in February with the intention of syndicating the bank’s half, while Stockland Trust retained the other half.

Stockland Unlisted Property Funds chief executive Robb Macnicol said the response was extraordinary, but reflected the high demand for high-quality unlisted products. He said Stockland would consider more direct property investment opportunities for both retial & wholesale investors.

More to the point, Stockland & Westpac made the offer particularly attractive.

Investors were offered ungeared $A1 units or geared units, through Westpac Investment Bank, with 60% payable in June 2010. Property Investment Research said in its report on the offering, the fund’s rating under the ungeared option was assisted by the high tax advantage of 100% for the expected initial 6-year term of the syndicate.

“As the distribution is 100% tax effective, the yield grosses up to 11.9% on a post-tax basis for an investor on the top marginal tax rate. Downside risk to investor income has been mitigated by $A3 million of rental income support from the vendor until June 2008.”

The 39-storey 10-year-old building was valued at $A291 million in June, on a 7.68% initial yield. It has 58,885m² gross lettable area, with a value of $A4942/gross m², and 493 basement parking spaces.

Website: Stockland