This article is from the Australian Property Journal archive
GROWTHPOINT has cashed in its investment in the Dexus Industria REIT to focus on growing its logistics platform after establishing the Growthpoint Australia Logistics Partnership (GALP) with TPG Angelo Gordon.
On Tuesday, Growthpoint announced the new partnership with the diversified credit and real estate investing platform within TPG Inc, which will see the global institutional capital partner to acquire a circa 80% interest in a portfolio of six existing Growthpoint industrial assets at book value.
The $181 million in net sale proceeds for include 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; and 3 Business Street, Yatala, QLD.
The sale proceeds reduce 30 June 2024 pro forma gearing by 2.0% to 38.7%, with a special distribution of 2.1 cps forecast announced, subject to completion of the transaction.
“We are pleased to form this capital partnership alongside an aligned global institutional partner with extensive investment experience,” said Ross Lees, CEO and managing director at Growthpoint.
“This partnership supports Growthpoint’s strategy to grow its funds management business and capital partnerships, and is a testament to the strength of our industrial portfolio.”
Meanwhile Growthpoint has sold of its entire holding in Dexus Industria REIT (DXI) at a price of $2.75 per security for a total consideration of $131.7 million.
“The investment in DXI was no longer considered a core strategic investment and now is the appropriate time to realise the value in this investment,” added Lees.
“Proceeds of the sale will initially be applied to the repayment of debt demonstrating our commitment to active management of the Growthpoint balance sheet.”
DXI itself has divested almost $300 million of assets over the past 24 months in an effort to strengthen its balance sheet – gearing is now 27.3% below the 30 to 40% target range – and DXI fund manager Gordon Korkie said it would continue to redeploy into its development pipeline, “where we achieve higher returns, with target yields on cost of 6.25% and above, while also improving overall portfolio quality with an investment in modern, highly functional warehouses”.
While in August, Growthpoint posted another year at a loss, after devaluations across both its office and industrial portfolio, with a statutory net loss of $298.2 million in FY24 after a loss of $245.6 million in FY23.
