General Property Trust has spin off its prime office assets into its first wholesale fund, the GPT Wholesale Office Fund, will initially hold $2.2 billion worth of assets.
The fund will see GPT establish and building third party funds management platform to meet the increasing demand from institutional investors for direct property exposure to quality real estate assets.
GWOF’s initial portfolio consists of interests in nine high quality office properties located in the major CBD office markets along Australia’s eastern seaboard with a value of $2.15 billion.
GWOF will be GPT’s core Australian prime CBD office investment partner, with GPT maintaining an interest in the portfolio through its stake in the fund.
GPT will continue to own the remainder of the group’s office portfolio on balance sheet, with exposure to seven assets with a value of $1.4 billion. Combined with GPT’s investment in GWOF, currently 40% of the fund, the group will have exposure to a highly diversified and quality office portfolio with a value of approximately $2.2 billion.
Strong institutional investor support for GPT’s initial offering resulted in the size of the offer being increased to $1.3 billion, representing what GPT believes to be the largest wholesale property fundraising in the Australian market.
The transaction will not impact distributions in 2006 and GPT’s forecast for the 2006 calendar year remains in line with the forecast of 27.5 cents per security as outlined in the May 2005 Explanatory Memorandum.
GPT’s chief executive Nic Lyons said the development of a funds management platform provides GPT with potential for stronger earnings growth and broadens the Group’s base of capital partners.
“The successful launch of GWOF represents a major strategic initiative in terms of GPT’s creation of a funds management platform in partnership with leading domestic and international wholesale investors.
“We have been delighted with the strong demand for the product, which demonstrates support for GPT as a manager and for our high quality, domestic real estate portfolio and access to property acquisitions and developments across all sectors. We anticipate developing further products for our funds management strategy, consistent with our aim to continue to diversify the Group’s income streams,” Lyons said.
GPT has also appointed Nicholas Harris as head of wholesale. Harris has spent the past five years as the fund manager for Lend Lease’s Real Estate Partners funds. Prior to that, he spent seven years with BT Funds Management.
Harris will work alongside the fund manager for GWOF, Martin Ritchie, who has worked in GPT’s office team for the past five years as an investment manager.
By Adam Parsons
GWOF Initial Portfolio | |||
Property | Asset grade | Office NLA (sqm) (100%) | Book value ($m) |
DARLING PARK TOWERS 1, 2, SYDNEY, NSW1 | Premium | 102,200 | 478.0 |
DARLING PARK 3, SYDNEY, NSW | Premium | 29,800 | 257.0 |
RIVERSIDE CENTRE, BRISBANE, QLD | Premium | 51,100 | 340.0 |
NATIONAL@DOCKLANDS, MELBOURNE, VIC | A grade | 59,500 | 311.1 |
530 COLLINS STREET, MELBOURNE, VIC | Premium | 67,900 | 292.5 |
HSBC CENTRE, 580 GEORGE STREET, SYDNEY, NSW | A Grade | 37,100 | 245.0 |
179 ELIZABETH STREET, SYDNEY, NSW | A Grade | 14,000 | 94.0 |
BRISBANE TRANSIT CENTRE, BRISBANE, QLD1 | B Grade | 29,600 | 78.7 |
10 & 12 MORT STREET, CANBERRA, ACT | A Grade | 15,400 | 50.4 |
TOTAL | 406,600 | 2,146.7 | |
Note 1: 50% interest
