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.
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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.
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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).
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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.
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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.
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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.
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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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