Growthpoint Properties Forms Strategic Partnership with TPG Angelo Gordon
GOZ (GOZ) Share Update September 2024 Monday 30th
Growthpoint Properties Announces New Logistics Partnership
Growthpoint Properties Australia (ASX: GOZ) has announced the formation of the Growthpoint Australia Logistics Partnership (GALP) with TPG Angelo Gordon, a move set to reshape its industrial asset portfolio and reduce gearing.
Instant Summary:
- Formation of the Growthpoint Australia Logistics Partnership (GALP) with TPG Angelo Gordon.
- Sale of 80% interest in six industrial assets at book value.
- Net sale proceeds of $181 million to reduce gearing by 2.0% to 38.7%.
- Special distribution of 2.1 cents per security forecast upon transaction completion.
- Settlement expected around December 2024, subject to FIRB approval.
Partnership Details
Growthpoint Properties Australia (Growthpoint) has entered into an agreement with TPG Angelo Gordon to form the Growthpoint Australia Logistics Partnership (GALP). This partnership involves the sale of an approximately 80% interest in six of Growthpoint's industrial assets, valued at book value as of 30 June 2024.
The assets included in the GALP portfolio are located across New South Wales, Victoria, and Queensland. Growthpoint will retain a 20% interest in these assets and will serve as the investment and property manager.
Financial Impact
The transaction is expected to generate net sale proceeds of $181 million. These funds will be utilized to repay debt, resulting in a reduction of Growthpoint's pro forma gearing by 2.0% to 38.7%. Additionally, a special distribution of 2.1 cents per security is forecasted, subject to the completion of the transaction.
Growthpoint's CEO and Managing Director, Ross Lees, expressed satisfaction with the partnership, highlighting its alignment with Growthpoint's strategy to expand its funds management business and capital partnerships.
Asset Portfolio
The assets included in the partnership are:
- 6-7 John Morphett Place, Erskine Park NSW
- 81 Derby Street, Silverwater NSW
- 6 Kingston Park Court, Knoxfield VIC
- 19 Southern Court, Keysborough VIC
- 20 Southern Court, Keysborough VIC
- 13 Business Street, Yatala QLD
Future Outlook
The partnership aims to focus on growth within the logistics sector in Australia. The transaction is expected to be completed around December 2024, pending approval from the Foreign Investment Review Board (FIRB).
This strategic partnership is likely to have a positive impact on Growthpoint's stock, as it aligns with the company's long-term strategy and strengthens its financial position. The reduction in gearing and the special distribution are expected to be well-received by investors.
Investor Reaction:
Analysts are likely to view this announcement favorably, given the immediate financial benefits and the strategic alignment with Growthpoint's growth objectives. The involvement of a global institutional partner like TPG Angelo Gordon adds credibility to the partnership.
Conclusion:
Investors should keep an eye on the completion of this transaction and the subsequent financial performance of Growthpoint. The partnership with TPG Angelo Gordon marks a significant step in Growthpoint's strategic growth in the logistics sector.