Goodman Property completes refinancing programme

Goodman Property Trust [NZX: GMT] has completed its refinancing for the year with a new $157 million debt facility for Wynyard Precinct Holdings, its joint venture with Singapore government-owned GIC.

The facility with Westpac Banking Corp has a weighted average term of 3.3 years. It replaces a facility in two tranches expiring this December and amounting to $127 million, of which $123.7 million had been drawn by March 31. Goodman's share is 51%, or about $80 million of the new facility, consistent with its holding in the JV.

"This was the last piece of financing work that needed to be done until next year," said Andy Eakin, chief executive of the trust's manager, Goodman (NZ). That will allow the JV to complete the $93 million purchase of Fonterra Cooperative Group's headquarters from Fletcher Construction next February. It plans to buy the nearby Datacom building for $86 million in April 2017.

Last month, Goodman refinanced its main banking facility for $600 million with a syndicate of ANZ Bank New Zealand, Bank of New Zealand, Commonwealth Bank of Australia, Hongkong and Shanghai Banking Corp and Westpac New Zealand. As at March 31, it had drawn down $406 million on the previous facility. In June it sold $100 million of 5% June 2022 bonds, replacing $150 million of maturing bonds, and in April it raised $US120 million in a US private placement issue in three tranches maturing in 10, 12 and 15 years at rates of 3.46% to 3.71%.

"That was a conscious strategy to diversify the sources of funds," Eakin said. "We took advantage early in the year of some really good [interest] rates."

The trust looks at refinancing about once a year, he said. It also has a strategy of recycling capital, selling eight properties last year for a total of $148.8 million, generating profits of $4.5 million.

Wynyard Precinct started with a portfolio valued at $313 million and a target to increase to $500 million. The joint venture includes Goodman's nearby Viaduct property interests.

Goodman's interest in the Wynyard Quarter began in 2006, with its acquisition of the Air New Zealand building and a 50% interest in Viaduct Corporate Centre in 2006. It gained options for further purchases via its relationship with ASX-listed Goodman Group, the owner of manager Goodman (NZ), which holds units in the trust and is in a separate partnership with Fletcher.

The trust's units last traded at $1.20 and have gained 10% in the past 12 months.

(BusinessDesk)