Property trust's $80 million capital raising to fund business park purchase an example for others, says analyst.
Goodman Property Trust's $80 million capital raising could spark a wider shakeup in the listed property sector, as other vehicles look to expand.
Craig Brown of OnePath, holding 3.3 per cent of units in the trust, predicted other capital raising initiatives from NZX-listed real estate companies and trusts.
The deal did not disadvantage existing Goodman unit holders, Brown said, predicting it would be fully subscribed.
"The sector has a bit of a head of steam behind it, which is good," Brown said, noting how the eight businesses specialising in real estate could take their lead from Goodman and seek funds in a similar way to expand portfolios. He noted that ASX-listed Goodman Group last week raised A$400 million ($510 million) to help speed development projects and fund its entry into Brazil.
The trust yesterday sought $60 million to fund full acquisition of Highbrook Business Park, via an institutional placement underwritten by Macquarie Securities (NZ) and Craigs Investment Partners and a further $20 million via a unit purchase plan from unitholders, capped at $30 million.
The $80 million fundraising is part of a $186.6 million deal involving cash, trust units and deferred payment elements to pay for Highbrook.
Shane Solly of Mint Asset Management said the trust was taking control of one of the country's best commercial developments.
The acquisition of Highbrook in total significantly increases Goodman Property's exposure to development assets and development activity.
"The test for Goodman management will be developing out the asset in a way that delivers quality property assets and appropriate returns for Goodman investors," Solly said.
Sir Noel Robinson, Fisher family trust chairman, said his entity would receive $112 million, of which half will be paid in units and $56 million in cash.
Some of the cash would go to entities established by his relative Sir Woolf Fisher, the late philanthropist and co-founder of Fisher & Paykel.
The beneficiaries are the descendants of Sir Woolf Fisher and charitable trusts, he said.
Keith Smith, chairman, said full ownership and the progression of the development programme would ensure that the business park became one of the principal drivers of the trust's investment returns.
The trust is buying out the 50 per cent owned by Goodman Group and the Fisher family.
Brown said that would reduce the complications of Highbrook's ownership structure.
"It's something we have been expecting them to do."
The trust also announced an improved first-half profit of $31.6 million, up 9.6 per cent on the same period last year when it made $29.1 million net profit after tax.
The Highbrook purchase is conditional on unit holder approval at an extraordinary meeting, Overseas Investment Act consent and completion of the private placement.
Goodman Property Trust extraordinary meeting, 11am, Friday December 7, Kingston Room, Rydges Hotel, 59 Federal Street, Auckland.
Highbrook Business Park
* 194ha at East Tamaki, 18km from Auckland CBD.
* 100ha of land left to be developed.
* Work started there in 2005.
* 240,000sq m of building now constructed.
* Goodman Property Trust wants control.
* EGM next month to decide.