This article is from the Australian Property Journal archive
GOODMAN Group has followed in the footsteps of Westfield Group, by making a foray into Brazil, the world's sixth largest and one of the fastest growing global economies.
Goodman has launched a $400 million equity raising of approximately 94.1 million securities at $4.25 per security to fund the expansion.
The group has formed a joint venture with WTORRE, one of Brazil’s leaders in the development and construction of industrial facilities and commercial real estate
WTORRE will contribute four existing development land sites, two in Sao Paulo and two in Rio de Janeiro, comprising 850,000 sqm of gross lettable area and a forecast total end value of $US1.1 billion.
CEO Greg Goodman said the group’s entry into Brazil is one of the world’s fastest growing economies with a population of 195 million and a growing middle class.
“Investors are attracted by the emerging market economic growth and stable geopolitical environment. The Brazilian industrial real estate market remains highly fragmented with clear capital constraints. This provides an opportune time to enter key logistics locations and develop top tier sites to deliver new investment product for global and local customers alongside our global capital partners, who have expressed a strong desire to invest alongside Goodman in Brazil.
“Our entry into Brazil further improves our position as a leading global logistics property group. With $20 billion of assets under management throughout Asia Pacific and Europe and following our recent launch into North America, our entry into Brazil represents a further strategic expansion of our operating platform to service our global customers and capital partners in one of the world’s fastest growing economies,” he added.
WTORRE, founded by Chairman Walter Torre Junior in 1981, has built more than five million sqm covering 211 projects across the office, retail and industrial sectors. The company has completed 71 logistics developments, most of which have been built to suit, and undertaken a number of landmark projects including Santander Brazil Headquarters in Sao Paulo, Rio Grande Shipyard, comprising the largest dry dock in the southern hemisphere and Petrobas’ new headquarters in Rio de Janeiro, which at 100,000 sqm will be Brazil’s largest commercial building. WTORRE’s customer base includes Carrefour, Nestle, Walmart, Volkswagen and Unilever.
The JV is to be known as WTGoodman. The board will comprise four representatives, two from each of WTORRE and Goodman, with WTORRE represented by their Chairman, Walter Torre, and CEO Paul Remy, and Goodman represented by Greg Goodman and Danny Peeters.
Torre said the establishment of WTGoodman is an exciting advancement for both companies.
WTORRE will contribute existing industrial development sites and Goodman will fund the capital expenditure up to the value of $R341 million ($A160 million). The JV will seek to undertake development of prime logistics and industrial properties and look to contribute those developments to an industrial investment partnership sponsored by Goodman’s global capital partners.
Meanwhile Goodman has agreed commercial terms to consolidate its interest in Macquarie Goodman Japan to 100% by sharing the net assets of Goodman Japan, currently valued at $A256 million (¥21.3 billion), with its joint venture partner Macquarie Group. The transaction is subject to agreeing documentation and is expected to be completed by December 2012.
Goodman and Macquarie are mutually seeking to split the assets of Macquarie Goodman Japan, which will result in Goodman Group owning 100% of the management company.
Goodman will also retain an interest in the Goodman Japan Core Fund of less than 30% of the equity, which is in line with its long term target holding and Macquarie Group is predominantly receiving units in GJCF for its share of the assets.
Goodman has reaffirmed its FY2013 operating EPS guidance of 32.3 cents, representing 6% growth on FY12.
“Today’s announcements further expand and strengthen Goodman’s global operating platform and its strategic and operational capabilities. The capital management initiatives enable the group to maintain a sound financial position and provide the ability to take advantage of long term growth opportunities in a sustainable manner.
“Our growth in the China region has exceeded our expectations and is reflected in the leading competitive position we have built over the years and our consolidation in Japan and expansion into Brazil demonstrate our ability to selectively and prudently grow our business.” Goodman concluded.
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