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GARDA PROPERTY GROUP — Capital/Financing Update 2019
Jun 23, 2019
64972_rns_2019-06-23_aa6a3361-cae6-40cd-8355-372c13cf44dc.pdf
Capital/Financing Update
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ASX Announcement / Media Release
GARDA Diversified Property Fund (GDF)
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24 June 2019
Asset acquisitions and recycling assets
GARDA Capital Limited ( GARDA ) as responsible entity of GARDA Diversified Property Fund ( Fund or GDF ) is pleased to announce:
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Acquisition of four industrial assets for $31.0m (excluding costs)
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Purchase price represents an initial yield of 7.6% and is supported by independent valuations
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Acquisitions provide significant re-development opportunities that are currently supported by existing leases and rental guarantees
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To partly finance the acquisitions, GDF will undertake a $6 million placement[1] to the vendors at $1.36 per unit
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Sale of 747 Lytton Road, Murarrie for $17.3 million representing a 17% premium to current valuation
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No impact on FY19 FFO and DPU with loan to value ratio (LVR[2] ) post acquisitions and sale of 37.8%
Acacia Ridge and Archerfield Industrial Acquisitions
GARDA has entered into an unconditional contract to acquire a portfolio of four established industrial assets in Acacia Ridge and Archerfield (the Portfolio ) for $31.0 million. The Portfolio consists of three neighbouring transport orientated warehouse properties bordering the Acacia Ridge Intermodal Rail Terminal and a further mature warehouse asset on Beaudesert Road, Archerfield.
Acacia Ridge and Archerfield are established industrial suburbs located only 12 kilometres south of the Brisbane CBD. Acacia Ridge is the largest freight handling terminal of the three intermodal rail terminals in Brisbane. Further to its proximity to rail infrastructure, the precinct is well linked through B-double routes to the Ipswich Motorway and, through Beaudesert Road, the Logan and Gateway Motorways.
The Portfolio provides GDF a further 21,195m² of net lettable area on a total land area of 7.6 hectares. The Fund will now comprise a majority of investment assets (89%), these income producing redevelopment assets (8%), and two greenfield development assets (3%).
| Property | Valuation ($) | NLA (m²) | Site Area (m²) | Fully Let NetIncome ($m) |
|---|---|---|---|---|
| 38 Peterkin Street, Acacia Ridge | 6,000,000 | 4,465 | 17,890 | 0.5 |
| 56 Peterkin Street, Acacia Ridge | 7,150,000 | 4,794 | 16,385 | 0.5 |
| 69 Peterkin Street, Acacia Ridge | 11,900,000 | 7,412 | 27,130 | 0.9 |
| 839 Beaudesert Rd, Archerfield | 5,950,000 | 4,524 | 15,000 | 0.5 |
| Portfolio | 31,000,000 | 21,195 | 76,405 | 2.4 |
All assets are considered to be near term, brownfield redevelopment assets. Two of the assets (56 & 69 Peterkin Street, Acacia Ridge) are currently vacant enabling immediate refurbishment or full redevelopment
1 Allotment of GDF units will occur to vendor nominee accounts.
2 LVR calculated as total interest bearing liabilities divided by total property assets.
Level 21, 12 Creek Street, Brisbane QLD 4000[| ] GPO Box 5270, Brisbane QLD 4001 P. (07) 3002 5300[|] F. (07) 3002 5311[|] [email protected]
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opportunities complimenting the Fund’s proven ‘asset creation’ strategy. These assets are supported by a rent guarantee. The other two assets are both largely leased on short term leases also allowing access for asset improvement strategies.
Murarrie Divestment
Following a recent expressions of interest campaign, GARDA is pleased to announce it has exchanged unconditional contracts to sell the office property located at 747 Lytton Road, Murarrie.
The sale price of $17.3 million represents a 17.0% premium to the last independent valuation of $14.8 million and is due to settle on or around Thursday 27 June 2019.
GARDA has previously communicated its intention to recycle capital from the Fund’s south-east Queensland suburban office assets. Following a successful re-leasing campaign over the past 12 months, the Murarrie property presented strongly to the market with 100% occupancy and a weighted average lease expiry (WALE) of 3.1 years.
The Varsity Lakes office building is now the only remaining south east Queensland office asset.
Funding
The acquisition of the Portfolio will be funded through sale of Murarrie, a placement of 4.4 million GDF units at $1.36 per unit to the vendors for total consideration of $6.0 million and existing GDF debt facilities.
Settlement of the Portfolio is anticipated to occur in early July 2019.
Portfolio Impacts
Upon completion of the divestment and acquisitions, material portfolio metrics will be:
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Sectoral diversification weighted 60% commercial and 40% industrial[3]
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WALE of 5.1 years[4]
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LVR of 37.8%
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Net tangible assets (NTA) of $1.37 per unit[5]
GARDA has recently announced its fourth Quarter distribution of 2.25 cents per unit taking total FY19 distributions to 9 cents per unit.
GARDA Executive Chairman Matthew Madsen said “We are delighted to announce these two capital transactions that result in the recycling of capital from Brisbane commercial to Brisbane industrial. Furthermore the Acquisitions provide an extension of the Fund’s “projects pipeline” into the future.”
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3 Sectoral diversification by property value.
4 WALE includes rental guarantees and heads of agreements.
5 NTA unaudited.
Level 21, 12 Creek Street, Brisbane QLD 4000[| ] GPO Box 5270, Brisbane QLD 4001 P. (07) 3002 5300[|] F. (07) 3002 5311[|] [email protected]
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For more information please contact:
| Matthew Madsen | Paul Brown |
|---|---|
| Executive Chairman | Manager, Investor Relations |
| GARDA Capital Group | GARDA Capital Group |
| Phone: 07 3002 5300 | Phone: 07 3002 5362 |
| [email protected] | [email protected] |
About GARDA Diversified Property Fund (ARSN 104 391 273)
GDF is an ASX listed real estate investment trust (REIT) which invests in commercial offices and industrial facilities along the eastern seaboard of Australia. GDF’s property portfolio of sixteen assets is independently valued at $363 million.
About GARDA Capital Limited
GARDA Capital Group is an ASX listed (ASX: GCM) real estate investment and funds management group. The GARDA Capital Group is co-invested in GDF holding a 13.8% stake. GARDA Capital Limited is the responsible entity of GDF, is a member of the GARDA Capital Group and holds AFSL 246714 which permits it to act as the responsible entity for GDF.
Level 21, 12 Creek Street, Brisbane QLD 4000[| ] GPO Box 5270, Brisbane QLD 4001 P. (07) 3002 5300[|] F. (07) 3002 5311[|] [email protected]