Goodman retained the strong support of its capital partner relationships over the last 12 months, reflecting the demand for prime industrial assets and the attractiveness of the Group’s specialist industrial product offering and development capability. We successfully raised $1.8 billion of new third party equity during the year, predominantly for North America, China and Japan, where we are executing a prudent development-led strategy with known customer demand. Our managed partnerships performed strongly over the year, providing our global investment partners with access to high quality growth opportunities not typically available on the market, coupled with targeted asset selection and rotation to drive investment returns and long-term value creation. Through the focused delivery of their investment strategies, our managed partnerships achieved on average a total return in excess of 16% over the last 12 months.
Third party assets under management increased to $25.2 billion at 30 June 2015 compared with $22.4 billion last year. This was primarily the result of positive asset revaluations, driven by strengthening industrial asset pricing globally, together with a number of developments completed by Goodman during the year. Our managed partnerships also completed a number of initiatives to diversify debt funding sources and lengthen debt maturity profiles, providing available investment capacity of $7.6 billion in undrawn equity, debt and cash. Combined with sale proceeds from ongoing asset rotation initiatives, Goodman’s managed partnerships are well positioned to participate in a broad range of growth opportunities in future years.
Goodman Chongqing Airport Logistics Park, Chongqing, China.
In New Zealand, a new strategic partnership was established between Goodman Property Trust (GMT) and Singapore’s sovereign wealth fund, GIC, to co-invest in Auckland’s Viaduct Quarter. The partnership will initially own a portfolio of assets comprised of GMT’s existing assets and valued at NZ$313 million, with a mandate to grow the partnership to NZ$500 million over time. GIC will acquire a 49% interest in the initial portfolio, with GMT retaining a 51% share and all future investments will be made on the same basis.
In Japan, ¥23 billion of new equity was raised by Goodman Japan Core Fund, enabling it to fund the acquisition of current and future development completions from Goodman Japan Development Partnership.
In China, Goodman and CPPIB increased the equity commitment to their Goodman China Logistics Holding joint venture by US$500 million, taking the total equity for the partnership to US$2 billion. Similarly in the US, CPPIB increased its equity commitment to Goodman North America Partnership (GNAP) by an additional US$500 million.
In Europe, Goodman European Logistics Fund (GELF) successfully priced an inaugural €500 million Eurobond issue on a five year term, with proceeds used to repay existing debt facilities. Separately, in New Zealand, GMT successfully completed a US Private Placement debt issue, securing US$120 million of long-term funding with a weighted average term of 12.3 years, to increase the diversity and tenor of its debt facilities. GMT also extended its retail bond programme, issuing a new NZ$100 million senior, secured seven year bond.
Red Bull, Sydney Corporate Park, Australia.
Copyright 2015 Goodman Group