This article is from the Australian Property Journal archive
AFTER setting up a team in November last year, Macquarie Goodman has sourced its first major investment in Japan by purchasing a stake in Japan Representative for ¥30 billion ($A304 million).
Macquarie Goodman Asia, a joint venture between Macquarie Goodman and Macquarie Bank, has bought a 53% stake holding in J-REP, a logistics property group listed on the Tokyo Stock Exchange (Mothers) Index and will have a market capitalisation post this transaction of circa ¥57 billion ($A574 million).
Macquarie Bank’s co-head real estate capital division James Hodgkinson Japan is a large and exciting market that presents a great opportunity in the logistics space.
Macquarie Goodman’s chief executive Gregory Goodman said J-REP’s experienced management team remain committed to the business going forward.
“Consistent with our expansion in Europe, J-REP’s similar customer service philosophy, experienced management team, local knowledge and high quality logistics assets provide a strong cultural fit with Macquarie Goodman Asia and gives us a platform in Japan which we have sought for some time,” he added.
J-REP will become Macquarie Goodman Asia’s Japanese platform and will remain listed on the TSE.
J-REP has experienced substantial growth through its transition phase and currently generates revenue from funds management, property services / brokerage and development management. Over the past 18 months the group has grown its assets under management to circa ¥86 billion ($A860 million).
Goodman said the proceeds from the transaction will provide the business with sufficient working capital to move rapidly to secure investment and development assets for its managed fund platform.
In addition J-REP will increase its investment in development projects via both co-investments into its managed funds and directly on its balance sheet.
J-REP is well advanced in preparing to launch a logistics fund in 2008 where a large portion of the business’ current assets under management as well as new properties secured with the Alliance proceeds will be used to seed this fund.
J-REP’s management team will continue in their current roles, with Macquarie Goodman’s Japan based staff being integrated into the J-REP platform. Post the Alliance, J-REP’s senior management will hold circa 19% of the expanded equity base.
Macquarie Goodman Asia has nominated three representatives to the J-REP board of directors, Gregory Goodman, James Hodgkinson and Stephen Hawkins.
“We are committed to expanding our presence in Japan and with a like minded partner such as Macquarie Goodman Asia we feel we can achieve our goals sooner and create value for all stakeholders,” J-REP’s founder and president Kiyohiro Wamoto said. ”We have for some time been looking for a way to provide our many local customers access to global markets and expect that we will in turn be able to provide Macquarie Goodman Asia’s customers with a full range of services in Japan.”
Macquarie Goodman Asia is subscribing for 75,950 new J-REP securities at a price per security of ¥400,000 representing a 3.5% discount to the one month average closing price. Macquarie Goodman’s $A162 million share of the acquisition price will be funded in Japanese Yen denominated debt from existing facilities and is expected to be neutral to earnings in FY07 and FY08 and contribute positively thereafter.
Macquarie Goodman’s gearing will rise to 45% in the short term.
Australian Property Journal