Press Release – Goodman NZ
Goodman (NZ) Limited, the Manager of GMT, advises a 10.2% reduction in the carrying value of the Trust’s property portfolio following the independent revaluation of its assets for the year ended 31 March 2009. The portfolio has a total value of $1.5 …
GMT Valuation Result
Date 31 March 2009 Release Immediate
Goodman (NZ) Limited, the Manager of GMT, advises a 10.2% reduction in the carrying value of the Trust’s property portfolio following the independent revaluation of its assets for the year ended 31 March 2009. The portfolio has a total value of $1.5 billion, as at 31 March 2009.
The 10.2% or $168.9 million reduction in asset values is an annual movement, which includes the $57.0 million devaluation in September 2008. The movement comprises an 8.9% reduction in the investment portfolio and an 18.5% reduction in the value of development land.
The valuations have been received by the Board of Goodman (NZ) Ltd (“GNZ”) as being the basis for the asset values to be used in the financial statements for the Trust for the year ending 31 March 2009 (subject to audit approval) and are released to the market pursuant to its continuous disclosure obligations.
John Dakin, Chief Executive Officer of GNZ said, “Property, like many asset classes, has been impacted by the credit crisis and a deteriorating economic outlook. Assets are being repriced in a unique environment where capital constraints and de-leveraging are having a significant impact on values.” The weighted average capitalisation rate of GMT’s investment portfolio is now 8.73%, up from 8.0% in March 2008.
GMT’s high quality industrial and business space portfolio has mitigated some of this valuation impact with strong customer covenants, a weighted lease term of 5.6 years, an occupancy level of 97% and market rental growth of 4.2%, partially offsetting the increase in capitalisation rates.
John Dakin, said, “The recent focus on balance sheet strengthening has ensured the Trust has maintained a conservative level of debt. Borrowings are expected to be approximately 36.0% of total property assets following the revaluation. This level is well within the 45% limit imposed by GMT’s banking covenants.” Greg Goodman, Chief Executive of Goodman Group and Director of GNZ, said: “GMT’s high quality property portfolio has a number of assets that are truly world class. It is a mature business that has a strong balance sheet and a proven business model. With its debt refinancing completed, and sufficient headroom in its banking covenants it remains a robust property business.” The valuation movement remains subject to the finalisation of GMT’s annual accounts but is expected to reduce net tangible assets by approximately 13 cents per unit, to an estimated $1.04 per unit. The movement excludes deferred tax impacts.