Macquarie builds sizeable Kiwi portfolio

By Chris Hutching

Friday 7th May 2004

Macquarie Goodman Property Trust was a little late in its request to the stock exchange on Wednesday for a trading halt pending a "material" announcement.

Anyone who regularly receives the Overseas Investment Commission's decision sheets would have read about the latest $72 million transaction on Tuesday afternoon and could have flooded share brokers with "buy" (or "sell") orders long before most investors had the opportunity to consider the deal.

Whether they would have been deemed "insiders" is unclear.

The trading halt failed to ignite frenzied buying but the unit price ticked up a cent to $1.01.

Macquarie Goodman Property Trust, listed in New Zealand, and its investment partner Macquarie Goodman Industrial Trust, a company listed on the Australian Stock Exchange, announced a conditional agreement to buy an 8.1ha ex-Fletcher site with just 48,500sq m of existing buildings and therefore plenty of space for more development, benefiting investors and the Macquarie group of companies.

To help fund the deal, Macquarie Equities will underwrite, for a fee of 1.5%, the placement of 21.75 million new Macquarie Goodman Property Trust units at 96c a unit, raising $20.9 million.

The site is near other Auckland properties owned jointly by Macquarie Goodman Property and Macquarie Goodman Industrial, including the Millennium Centre, Central Park Corporate Centre, Penrose Industrial Estate and the Gate Industry Park.

Fletcher Building has a head lease on the 8ha property with just five years to run. It pays $6.5 million annually, giving a yield of 9% on the price paid. Analysts said economic growth would determine the pace of developments at the Fletcher site.

Macquarie Goodman NZ chief executive John Dakin said benefits to unit holders included an enhanced industrial property sector focus, greater portfolio diversification, reduced gearing to 35%, an increase in the weighted average lease term to expiry to 3.9 years, an improved occupancy rate to 99%, and increased index weighting of Macquarie Goodman Property, creating greater liquidity for unit holders. The company is on target to deliver a projected gross distribution of 9.3c a unit for the year ending June 30, 2005.

* Macquarie Goodman Industrial Trust is managed by Macquarie Goodman Funds Management, a subsidiary of Macquarie Goodman Management. The Macquarie Goodman Property Trust is managed by Macquarie Goodman NZ, a subsidiary of Macquarie Goodman Management.

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