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NZ Goodman lines up new Fonterra base

Property Here - Tuesday, April 02, 2013

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John Dakin NZX-listed Goodman Property Trust could own the new $60 million to $80 million Fonterra headquarters to be built near Auckland's waterfront.

John Dakin, chief executive of the trust with a $1.2 billion market capitalisation, signalled strong intentions for the widely held listed landlord to eventually add the new HQ to its portfolio.

"At this stage it is highly likely that Goodman Property Trust will be involved with the Fonterra development. The independent directors of the trust have expressed a strong interest in owning the asset and the trust has first rights over any Goodman Group activity in New Zealand," he said.

Keith Smith, Leonie Freeman, Susan Paterson and Peter Simmonds are independent directors of the business in which Goodman Group owns about 17 per cent, and OnePath, ACC and BT have stakes.

But Dakin said no NZX statement has been issued on the deal yet because it was too early and nothing was decided.

"As Fonterra said, they have run a selection process with a preferred developer, but there's a period of final negotiation and design and planning so we have an incomplete proposal.

Till there's certainty around all of those things, there's nothing to be announced in terms of the trust," he said, adding that professional advice had "obviously" been taken on whether to issue an NZX announcement.

"At this stage, the focus of the joint venture partners of Fletcher and Goodman is working through all the detail around final design, size, planning, and remaining commercial issues. This work will be finalised over the next few months," Dakin said.

"Once this is resolved the final parameters of the development will be assessed and the involvement of the trust finalised. Goodman Group and the trust have a strong track record of working well in partnership for the benefit of all investors and I expect this to continue with this particular development," he said.

But he said people who criticised the deal and questioned the independence of decisions should not rush to judge arrangements too soon.

"Everyone is getting ahead of themselves in terms of the scale and size before any decisions have been made," he said, after reports of a $500 million deal on the site where up to five big new office blocks could rise.

Asked how much potential profit a $60 million to $80 million project could yield, Dakin said he was not prepared to say "because none of the detail has been knocked out yet".

Institutional investors said they could not judge the trust's fortunes after Goodman Group and Fletcher were this month shortlisted to develop the block opposite Victoria Park.

Professional investors see the potential for a conflict of interest on the deal, with the manager cutting out trust investors, but they say not enough information is yet before them to say how the deal will stack up for the trust.

Dakin said the trust and its manager had a successful relationship which enhanced the interests of investors.

Property presence

Goodman Group
ASX listed, trading at A$4.80
Industrial landlord with $10b market cap
World's second biggest industrial property manager by market value
In 36 countries, owns 400 properties
Sydney headquartered
CEO: Greg Goodman

Goodman Property Trust
NZX listed, trading at $1.05
Market capitalisation: $1.2b
Industrial landlord, only in NZ
Auckland headquartered
CEO: John Dakin