Goodman, GIC ink $635m deal

One of the world’s largest commercial property investors has bought seven office buildings on Auckland’s waterfront for a whopping $635 million.

The VXV office precinct in the Wynyard quarter is jointly owned by Goodman Property Trust (51 per cent) and Singaporean wealth fund GIC, which have both decided to sell their stakes to funds of global firm Blackstone.

VXV covers 88,000 square metres of space and includes the headquarters of Fonterra, Air New Zealand, Datacom, Bayleys, KPMG, Auckland Transport, HP and Microsoft.

John Dakin, chief executive of Goodman (NZ), which manages Goodman Property Trust, said it was one of the biggest commercial property sales of recent times and probably Blackstone’s first major purchase in New Zealand.

‘‘It’s a very strong vote of confidence in the Auckland and New Zealand market to get a buyer like that coming in.’’

Dakin said the sale had been profitable for both parties, even though GIC had only owned its stake since 2014.

The gross sale price gave a passing yield of 6.6 per cent and research house Macquarie estimated that it was 15 per cent above book value.

The sale also completes Goodman’s asset sale programme as it shifts away from office property and more heavily towards industrial space.

Goodman’s $2.2 billion portfolio will now be almost entirely made up of Auckland industrial property and it has a $300m pipeline of potential projects. Recent asset sales have netted the listed trust about $1.2 billion towards reducing debt and funding more development.

Goodman’s new focus reflects a growing and acute shortage of industrial buildings in Auckland.

‘‘We think we’re going to see some really big tailwinds around the world that relate to e-commerce, automation [and] robotics. And . . . if you’ve got industrial property close to consumers, if it’s well located, it’s becoming incredibly valuable,’’ Dakin said.

The VXV transaction remains subject to Overseas Investment Office and freehold landowner approval, but is expected to settle late next year.

It is not expected to have a material impact on Goodman NZ’s 2019 earnings.