Goodman Group
Goodman Limited | ABN 69 000 123 071
Goodman Funds Management Limited | ABN 48 067 796 641 | AFSL Number 223621
as responsible entity for Goodman Industrial Trust | ARSN 091 213 839
The Hayesbery, 1-11 Hayes Road, Rosebery NSW 2018 | GPO Box 4703, Sydney NSW 2001 Australia
Tel +61 2 9230 7400 | Fax +61 2 9230 7444
Goodman Logistics (HK) Limited | BRN 59357133 | ARBN 155 911 149 | a Hong Kong company with limited liability
Suite 901, Three Pacific Place, 1 Queen’s Road East, Hong Kong | Tel +852 2249 3100 | Fax +852 2525 2070
info-au@goodman.com | www.goodman.com
26 February 2024
Market Announcements Office
ASX Limited
Via ASX Online
Dear Sir/Madam
RE: NZX announcement – Goodman Property Trust (GMT) positioned for growth with
Internalisation Proposal
Please find attached a copy of a New Zealand Stock Exchange announcement by NZX listed
Goodman Property Trust (GMT) to internalise the management of GMT. The proposal is subject
to GMT unitholder approval.
Yours faithfully,
Carl Bicego
Company Secretary
Authorised for release to the ASX by Carl Bicego, Company Secretary and Group Head of Legal
and Risk.
Goodman (NZ) Limited, Level 2, KPMG Centre, 18 Viaduct Harbour Avenue, Auckland, New Zealand 1010
PO Box 90940, Victoria Street West, Auckland 1142
Tel +64 9 375 6060 | info-nz@goodman.com | www.goodman.com/nz
nzx release+
GMT
positioned for growth with Internalisation Proposal
Date
26 February 2024
Release
Immediate
The Board of Goodman (NZ) Limited (“GNZ”) has entered into an agreement to
internalise the management of Goodman Property Trust (“GMT”)
to support its future
growth strategy ("Internalisation Proposal").
Conditional on Unitholder and other approvals, the change to the corporate structure would
bring to an end the existing external management arrangement with ASX-listed Goodman
Group and effectively transfer these functions to GMT.
James Spence, Chief Executive Officer of GNZ said, “Internalisation is expected to provide
growth opportunities for our business, and immediate and longer-term benefits to our
Unitholders. It reduces expenses, diversifies income, and enhances the ability to recycle
capital through the establishment of a complementary property funds management
business.”
Overview of the Internalisation Proposal and process
Led by Deputy Chair of GNZ, David Gibson, a sub-committee of the Independent Directors
was established to consider and negotiate the terms of the Internalisation Proposal with
Goodman Group. Through its subsidiaries, Goodman Group has been the manager of GMT
and a cornerstone investor since 2003.
Following the successful conclusion of this process, an agreement has been entered into to
effect the change, which will involve the assumption of management functions by Goodman
Property Services (NZ) Limited ("GPSNZ").
GMT’s property investment strategy of owning high quality Auckland logistics property
remains unchanged and there is continuity of business operations. This includes retention of
James Spence, CEO and the wider executive team in their current roles. The directors of
GNZ will also become directors of GPSNZ, with the new manager entity to be effectively
controlled by Unitholders.
Key terms of the Internalisation Proposal include:
+ Goodman Group will be paid $272.4 million to relinquish its management rights, for
the shares in GPSNZ and for the associated co-operation arrangements a
nd
se
rvices. Net of tax, the $199.3 million consideration represents a 9.1x multiple of t
he
$22.0 million normalised FY24 savings GMT expects to realise, which is consistent
with precedent transactions.
+ An additional $17.6 million will also be paid to Goodman Group to settle GMT’s
performance fee obligations, to acquire its interest in co-owned (with GMT
)
investment properties and for the net tangible assets of GPSNZ.
+ Goodman Group will use the total consideration of $290 million to subscribe for new
units in GMT at $2.14 per unit (being the 5-day VWAP to 20-Feb-24), increasing its
cornerstone investment in GMT to 31.8%.
Independent Appraisal Report
Deloitte, the Independent Appraiser, assessed the $272.4 million consideration as being
within their fair market valuation range of $268 million to $315 million and therefore concluded
that the Internalisation Proposal was fair to non-associated Unitholders. They also concluded
that the issue of new units to Goodman Group was fair to non-associated Unitholders. Their
full report is attached to the Notice of Meeting released today.
David Gibson said, “Internalisation is a positive initiative that positions GMT for the next
phase of its business growth. With the many benefits it provides and within Deloitte’s fair
value range, the initiative presents a great opportunity for our Unitholders.”
Internalisation is expected to deliver 2.8% accretion to FY24 pro forma adjusted funds from
operations.
1
It is also expected to provide greater alignment of interests with the board and
executives of GPSNZ being remunerated directly by GMT.
Internalised management to establish property funds management business
Subject to internalisation proceeding, GPSNZ will seek to establish a funds management
platform anchored by a new Auckland logistics property fund. Initially investing up to $100
million
2
itself, and with a commitment of up to $200 million
2
from Goodman Group, GMT will
leverage Goodman Group’s global investor relationships to secure further third-party capital.
John Dakin, Chair of GNZ said, "GMT's substantial Auckland industrial portfolio, urban
logistics focus, development pipeline, sector expertise, balance sheet flexibility and scalable
platform have supported its successful investment track record."
"We believe internalisation will enable GMT to reach its full potential and create further value
for all our stakeholders."
With the flexibility to acquire assets on-market and directly from GMT’s existing portfolio,
GPSNZ’s funds management platform has a target of scaling to ~$2 billion within three-to-
five-years.
James Spence said, "The establishment of a funds management business and introduction of
new capital partners complements GMT’s current investment strategy. The positive income
contribution from management fee revenue and an enhanced ability to recycle capital is
expected to support annualised earnings growth of between 5% and 7% within the next three-
to-five years.”
Benefits of Goodman relationship to continue
Chief Executive Officer of Goodman Group, Greg Goodman said, “This transaction is all
about growth and capturing the opportunity available in the New Zealand market. Additionally,
access to alternative funding sources will allow GMT to finance this growth in a way that will
generate significant value for GMT Unitholders.”
James Spence said, “Internalisation presents an exciting opportunity for GMT. Retaining all
the benefits of the Goodman brand, we've got the team, property portfolio, customer
relationships and market expertise to scale up our business and deliver an investment
strategy focused on sustainable value creation.”
1
Assuming the issuance of Units to Goodman Group at an issue price of $2.14 per Unit, treating the benefit of current and future
tax deductions associated with internalisation as if they had repaid debt. Accretion to adjusted funds from operations (“AFFO”), a
metric which captures the benefit of leasing fees no longer being payable to a third party and which are not reflected in cash
earnings
2
Subject to settlement of the Internalisation and final approval of its terms.
Investor presentation and FY25 guidance
A presentation providing further details of the Internalisation Proposal has been provided to
the NZX. There will be an online presentation to investors, analysts and media at 9:15 am,
today. The link to the webcast is: https://ccmediaframe.com/?id=Dw4yg7Uo
Underlying cash earnings guidance for FY24 is reaffirmed at around 7.4 cents per unit, with
full year cash distributions of 6.2 cents per unit expected to be paid.
James Spence said, “FY25 guidance for an internalised GMT is also provided, with cash
earnings forecast to be around 7.5 cents per unit. The guidance represents a 5% increase
on restated FY24 cash earnings.”
3
FY25 cash distributions of 6.5 cents per unit are forecast, a 5% increase on FY24 and
representing around 87% of cash earnings.
Notice of Meeting
Given the related party nature of the Internalisation Proposal, Unitholder approval is being
sought and a Special Meeting will be held at 10am on Tuesday 26 March 2024 at the Park
Hyatt Hotel, 99 Halsey Street, Auckland 1010.
There are three resolutions detailed in the Notice of Meeting and all resolutions must be
approved for the Internalisation Proposal to proceed.
Deputy Chair and Independent Director of GNZ, David Gibson said, “The Independent
Directors unanimously recommend that Unitholders vote in favour of all three resolutions.”
The Notice of Meeting, which explains the resolutions in more detail, together with the Voting
and Proxy Form are being distributed to Unitholders from today.
Investors are encouraged to read the Notice of Meeting carefully, including the Independent
Appraisal Report. If they have any queries or questions on the resolutions or other
information contained in the Notice of Meeting, they should contact their financial, taxation or
legal adviser. They can also call the investor advisory line on 0800 292 983 or +61 3 9415
4264 from outside New Zealand.
For
further information, please contact:
John Dakin David Gibson
Chair Deputy Chair and Independent Director
Goodman (NZ) Limited Goodman (NZ) Limited
(021) 321 541 (021) 276 9440
Jam
es Spence
Chief Executive Officer
Goodman (NZ) Limited
(021) 538 934
Attachments provided to NZX:
1. Covering Letter to Unitholders
2. Goodman Property Trust Notice of Special Meeting
3. Voting and Proxy Form
4. Presentation on the Internalisation Proposal
3
FY24 cash earnings restated, from 7.4 cents per unit to 7.1 cents per unit, to adjust for the expected removal of tax deductions
for building depreciation from the beginning FY25
About Goodman Property Trust:
GMT is an externally managed unit trust, listed on the NZX. It has a market capitalisation of around $3.0 billion, ranking it in the
top 20 of all listed investment vehicles. The Trust is New Zealand’s leading warehouse and logistics space provider. It has a
substantial property portfolio, with an expected value of $4.5 billion at 31 March 2024. The Trust also holds an investment grade
credit rating of BBB from S&P Global Ratings.
The Manager of GMT is Goodman (NZ) Limited, a subsidiary of the ASX listed Goodman Group. Goodman Group is a global
industrial property and digital infrastructure specialist group with operations in key consumer markets across Australia, New
Zealand, Asia, Europe, the United Kingdom, and the Americas.
Disclaimer
The information contained in this announcement ("Announcement") is intended to provide general information only and does not
take into account your individual objectives, financial situation or needs. It is not intended as investment or financial advice and
must not be relied upon as such. Some of the information in this Announcement is based on unaudited financial data which may
be subject to change. You should consider talking to your financial, taxation or legal adviser before making any decision in
relation to the matters contained in this Announcement. This Announcement is not an offer or invitation for subscription or
purchase of securities or other financial products.
All reasonable care has been taken in relation to the preparation and collation of the Announcement. None of GMT, the
Manager, any of their respective officers, employees, agents or associates, or any other person accepts responsibility for any
loss or damage howsoever occurring resulting from the use of or reliance on the Announcement by any person.
Caution regarding forward-looking statements
This Announcement contains certain forward looking statements, which are subject to risks (both known and unknown),
uncertainties, assumptions and other important factors that could cause the actual conduct, results, performance or
achievements of GMT to be materially different from the outcomes reasonably expected by GMT at the time of this
Announcement. Deviations as to future conduct, market conditions, results, performance and achievements are normal and are
to be expected.
Forward looking statements generally may be identified by the use of forward looking words such as 'aim', 'anticipate', 'believe',
'estimate', 'expect', 'forecast', 'foresee', 'future', 'intend', 'likely', 'may', 'outlook', 'planned', 'potential', 'projection', 'should', or other
similar words.
None of GMT, the Manager, or any of their respective officers, employees, agents or associates gives any representation,
assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this
Announcement will actually occur. You are cautioned against relying on any such forward looking statements. Forward looking
statements may refer to any information relating to the future, including (but not limited to) opinions, forecasts, estimates,
projections, business plans or strategies, budget information or other future or prospective information.
