This article is from the Australian Property Journal archive
THE Goodman Group has proposed to buy the Moorabbin Airport and business park in Victoria for $201.5 million from the privately owned Goodman Holdings.
The substantial 294 hectare airport and business park is located in Melbourne’s inner south east and comprises 123ha of prime business park space.
Goodman Group has had an interest in Chifley Business Park, which forms part of the property, since 1999. It originally undertook the development and subsequently sold its interest to the Goodman Australia Industrial Fund. Chifley Business Park is a 37ha estate with a current total investment value of $106 million.
To date 50ha of industrial and retail space has been developed on the site and produces an income of $91.6 million boasting 100% occupancy, a weighted average capitalisation rate of 7.8% and a weighted average lease expiry of 20.2 years.
The site is currently occupied by major customers including Coca Cola, Visy, CASA, Oxford Aviation and DFO.
Goodman has proposed to retain a subsidiary of Goodman Holdings for the operation of the airport and will make payments of $1.7 million per annum escalating at 3% per annum.
The acquisition will be funded via an issue of ordinary equity of $146.52 million, $35.0 million of vendor finance and $20.0 million cash to fund working capital.
Goodman Group chairman Ian Ferrier said the proposed acquisition provides the group the opportunity to apply its fully integrated business model to maximise value as it conducts the next stage of development at the property.
Chief operating officer Anthony Rozic said the proposed acquisition is directly in line with Goodman Group’s Melbourne business strategy to own, develop and manage business space in prime locations.
“The proposed acquisition provides immediate investment income and a proven investment in the land constrained market of inner south east Melbourne which would not be possible to replicate,” he added.
The independent directors, in their assessment of the acquisition, have determined that the property is of strategic importance and consistent with the group’s strategy in this region.
The group will announce its annual results on 19 August 2010.
Australian Property Journal
