Goodman Property Trust has announced that it is undertaking four new development projects to meet rising customer demand.
Chief Executive Officer, John Dakin said “Ongoing leasing success and high levels of customer enquiry continue to drive our development programme. To meet this demand and facilitate future growth, we are commencing new development and infrastructure projects.”
The four developments, which have a total project cost of $33.4 million 1, are expected to generate around $2.8 million of annual income.
John Dakin said “An active asset sales programme is financing this value adding development activity and we are also pleased to be announcing the sale of the Carter Holt Harvey Packaging Facility in Hornby, Christchurch, for $16.37 million.”
Development and leasing success
The building programme at Central Park Corporate Centre in Greenlane, Auckland, has supported the construction of two new office buildings over the last 24 months. These buildings add around 11,200 sqm of high quality office accommodation to the $170 million office park.
In the latest office development, international insurance company YOUI has just committed to a nine year lease over 4,600 sqm of space. The five level, campus style building is now over 75% leased, four months ahead of its scheduled completion in January 2015.
The strong leasing result mirrors the success of the 5,350 sqm green star rated building that completed in 2013. Long term commitments from Genesis Energy and Restaurant Brands ensured this office development was fully leased well ahead of its scheduled completion.
The positive leasing outcomes and ongoing development activity at Central Park are the catalyst of new infrastructure projects that include the refurbishment and upgrade of the childcare and gym facilities, together with the development of a new multi-level car park building (providing an additional 600 covered spaces).
John Dakin said “Customer demand is strong across the portfolio and this is reflected in our high occupancy rate of 97%. The new lease to Mainfreight at Highbrook Business Park demonstrates the quality of our properties with this substantial estate now fully occupied. To accommodate the demand for industrial facilities in this location we are commencing another uncommitted development of a similar size.”
The new 5,400 sqm warehouse is of a scale and design that is expected to appeal to a range of companies seeking high quality business accommodation.
GMT’s proven development capability is also facilitating the business growth of existing customers.
At Westney Industry Park in Mangere, DSL Logistics Limited has committed to a 3,000 sqm extension to its existing warehouse facility. The new eight year lease over the expanded premises, which will total 7,750 sqm is complemented by a five year lease over another adjoining facility.
John Dakin said “The new projects announced today continue the momentum in our development programme. With the earlier design-build commitments from Steel & Tube and Ford we have increased the volume of development activity announced in the last six months to around $77.9 million. Based on current demand, we expect to commence over $100 million of new projects this financial year.”
A buoyant investment market, with both local and offshore investors competing for stock, means that asset sales are now the Trust’s preferred source of development funding.
John Dakin, Chief Executive Officer of Goodman (NZ) Limited, said “A growth strategy focused on asset recycling is enhancing the portfolio and contributing to strong investment gains for the Trust. The sale of the Carter Holt Harvey asset means that over $45 million of disposals have been secured already this year. It is a successful strategy that is helping fund an increasing level of development activity.”
Further disposals are planned and other properties are being actively marketed for sale as part of the Trust’s asset recycling programme.
About Goodman Property Trust:
GMT is an externally managed unit trust, listed on the NZX. It has a market capitalisation of around $1.3 billion, ranking it in the top 15 of all listed investment vehicles. The Manager of the Trust is a subsidiary of the ASX listed Goodman Group, Goodman Group are also the Trust’s largest investor with a cornerstone unitholding of 17.6%.
GMT is New Zealand’s leading industrial and business space provider. It has a substantial property portfolio with a value in excess of $2.0 billion that accommodates around 260 customers. The Trust holds an investment grade credit rating of BBB from Standard & Poor’s.
1 Total project cost includes all land allocation costs, construction costs, all professional fees and any leasing and marketing expenses.