Thursday, January 14th, 2010
Growthpoint Properties Australia (ASX:GOZ) has an extensive investment portfolio of Australian industrial properties. GOZ has no property development or funds management businesses.
GOZ was formed through the restructure and recapitalisation of Orchard Industrial Fund (OIF) in August 2009. The restructure involved:
- placement of $55.6 million of OIF units at $1.60 each to Growthpoint Properties Ltd, a South African listed property investment company;
- management internalisation and stapling of shares in Orchard Management Ltd, the responsible entity, to units in OIF to form a stapled security;
- broadening of OIF’s investment mandate from only industrial property to include retail and office properties;
- $144.4 million rights issue to all security holders at $1.60 per security, fully underwritten by Growthpoint Properties Ltd; and
- A name change to Growthpoint Properties Australia.
Following the restructure, financial leverage reduced from 74% as at 30 June 2000 to 46% on a pro forma net debt to total asset basis.
GOZ’s portfolio currently comprises of 24 Australian industrial properties as tabled in Figure 1.
The fundamentals of the property portfolio are strong with:
- 98% occupancy
- 68% of rental income from a blue chip tenant Woolworths
- weighted average lease expiry of 11 years
- no lease expiries until 2012
- 93% of leases are subject to fixed annual rental increases of 2.5% – 4% p.a. The remaining leases are subject to CPI increases