DNZ Property to buy Countdown supermarket properties for $287M, raise up to $129M

Wednesday 23rd September 2015

DNZ Property Fund, which is rebranding as Stride Property, has entered into a deal to buy a supermarket property portfolio for $287 million, and will help fund the acquisition by raising up to $129 million of new capital.

Auckland-based DNZ has entered into a deal with Antipodean Supermarkets and Antipodean Properties to buy 19 Countdown supermarket sites leased to Woolworths, which it expects will lift distributable profit per share by between 1.3 percent and 1.8 percent in the first three full years of ownership. The property investor will fund the acquisition with debt and equity, raising about $114 million through an underwritten placement to eligible investors and shareholders, followed by a share purchase plan to raise a further $15 million, it said in a statement.

"This is a strong investment and delivers our shareholders an increase in dividend," chairman Tim Storey said. "It provides DNZ with an opportunity to grow its real estate management business with a separate specialised investment product."

DNZ has been selling property to help fund its $155 million NorthWest Shopping Centre development in Auckland, which was scheduled for completion in October.

The supermarket acquisition is expected to settle between Oct. 28 and Nov. 12, and three of the properties, worth $33.9 million, require third-party consents which DNZ said will probably be obtained within 12 months of the sale and purchase agreement.

Separately, DNZ increased guidance for its 2016 cash dividend to 10.75 cents per share from 10.5 cents, and is targeting a payment of at least 11.25 cents in 2017.

Trading in the shares was halted for the placement, and last traded at $2.075, and have increased 8.6 percent this year.

BusinessDesk.co.nz

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