GPT announced this week a fully underwritten $800 million Institutional Placement and a non-underwritten Security Purchase Plan to raise up to $50 million to fund their recent acquisition of the 25% interest in Darling Park and to funding the next stage of growth from within the Group’s development pipeline.
The new securities under the Placement will be issued at a fixed issue price of $6.07 per security, representing a 4.1 per cent discount to GPT's closing price on 18 June 2019.
GPT will use $531M to acquire the Darling Park interest and $227M to initially repay debt but clearly earmaked for reallocation to new developments, which include:
• A 26,400 square metre facility at Truganina, Melbourne (development cost: $33 million);
• A 20,500 square metre facility at Wembley Business Park, Brisbane, pre-leased to an international logistics provider (development cost: $44 million); and
• A 14,350 square metre facility, also at Wembley Business Park (development cost: $25 million).
The Group also expects to commence the new office and retail development at Melbourne Central in 2020 and is on track to with the delivery of its $266 million office development at 32 Smith Street, Parramatta.
The Group is also well progressed on securing a new 50,000 square metre pre-leased logistics investment opportunity in Western Sydney via a fund-through arrangement.
As a result of the capital raising GPT provided the following update to FY19 guidance:
• Funds From Operations per security growth of 2.5 per cent on FY18 (down from 4% growth); and
• Maintaining Distribution Per Security growth of 4 per cent on FY18.
Approximately 71 per cent of the portfolio by value is currently being independently valued in the six months to 30 June 2019. The revaluations are expected to result in a net revaluation gain of approximately $102 million, or 0.7 per cent, with a weighted average capitalisation rate of 4.99 per cent.
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