Goodman (NZ) Limited, the Manager of Goodman Property Trust, a joint venture (JV) between Goodman (NZ) Limited, the Manager of Goodman Property Trust (Trust or GMT) and Singapore’s sovereign wealth fund GIC will acquire Bayleys House for a consideration of NZ$62.3 million ($42.7 million).
The recently completed 8,106 sqm office building adjoins the Fonterra Centre on the corner of Gaunt and Halsey Streets in the VXV Precinct of central Auckland.
John Dakin, Chief Executive Officer of Goodman (NZ) Limited said, “This is a high-quality acquisition that extends and diversifies the joint venture’s portfolio of Viaduct properties. The partnership strategy provides scale for GMT and gives the Trust greater exposure to Auckland’s fastest growing commercial precinct.”
The low-rise property features large flexible floor plates and incorporates sustainable architectural elements and energy efficient building systems.
Predominantly leased to real estate specialists Bayleys, technology provider IBM and law firm Mayne Wetherell, the new leases incorporate fixed review structures and have a weighted average term of nine years. The ground lease obligations are structured for a period of 15 years.
Acquired from Goodman Group, which undertook the development on a build-to-lease basis, the purchase price reflects an initial yield of 7.6 per cent on contract rentals. Additional fit-out rent increases the passing yield to 8.8 per cent.
The acquisition, which remains conditional on the approval of the freehold landowner, is expected to settle in June 2017. Following this acquisition and the purchase of the Datacom Building, which settles today, the JV will own seven buildings within the VXV Precinct.
With a value of more than $470 million ($322.5 million), the portfolio will provide over 88,000 sqm of office accommodation to around 20 customers. The portfolio has an occupancy rate of 96 per cent and a weighted average lease term of more than nine years when future lease commitments are incorporated.