$268m foundation for Macquarie Goodman Trust growth

Macquarie Goodman Property Trust sees its Westney Industry Park as its biggest growth opportunity.

Macquarie Goodman Property Trust has projects worth $268 million in the development pipeline, giving it strong growth prospects.

John Dakin, chief executive of the trust's manager, told a UBS investor group of the trust's opportunities, particularly in industrial real estate.

The trust, ranked as one of the top 25 entities on the NZX top 50 index, owns properties valued at $927.4 million - a 71 per cent increase since March last year, when its properties were worth $541.8 million.

Since then, it has bought properties from its manager, ASX-listed Macquarie Goodman Group.

In March this year, the trust was criticised for doing deals with this related party and for the way it presented information to investors on the big property deals, after institutional owner Accident Compensation Corp questioned the trust's management fees and its levels of disclosure.

Dakin said the trust had an industrial order book of $245.8 million and $22.2 million of office park developments in the pipeline.

"In a really full market it's tough to buy land, so if you can develop your own good-quality assets it's a strong compliment to your business," he said.

Its biggest opportunity was at its 34ha Westney Industry Park in Auckland, which it owns with manager Macquarie Goodman.

It has leased 40 per cent of the site and has 122,368sq m of lettable area yet to be developed.

The next largest site was the 24ha Savill Link, also owned jointly with its manager.

The trust had leased 30 per cent of the area but has the potential to add a further 101,573sq m of buildings.

Opportunities at the trust's 6.2ha Central Park Corporate Centre at Greenlane would bring a further 14,180sq m of buildings, Dakin said.

Rents on the trust's portfolio were below market rates, giving it the ability to push up returns when leases came up for renewal.

The office park portfolio was under-rented by 4.2 per cent and the industrial estate portfolio was under-rented by 5.6 per cent, Dakin said.

When the two sectors are combined, the trust's portfolio is 4.9 per cent under-rented. Rent reviews would enable the trust to push up rents to market levels, giving it growth which would flow through over the next few years, Dakin said.

Unit-holders had been paid a 21.5 per cent total return since December 2003, he said.

"The outlook for the trust remains strong with growth and further potential via the development pipeline," he told investors.

The trust had grown from employing four people in January 2004 to having 43 people on the payroll today.


BIG LANDLORD

Macquarie Goodman Property Trust started in NZ in 2002.

In 2003, it bought Colonial First State Property Trust.

It is a specialist industrial landlord with properties worth $927.4 million.

It sees New Zealand's industrial property market as fragmented.

It believes the market is less mature in NZ than in Australia.

It sees market consolidation and growth opportunities in NZ.