Free rent deals normal, admits Goodman team

Unitholder Alan Best quizzes the Goodman management. Photo / Richard Robinson

Goodman Property Trust unitholders heard how their business was having to give tenants up to a month's free rent to entice them into buildings.

Investor Alan Best asked the trust's management at yesterday's annual meeting in Auckland's Stamford Plaza what the leasing market was like.

John Dakin, chief executive of the trust's manager, said it had become common to allow tenants incentives to lease new buildings.

"About a month's free rent for every year - that's on average what we're doing but every deal is a little different," Dakin said.

The trust's properties were devalued by 10 per cent in the last year, $50.6 million of real estate has been sold and a $900 million debt facility was renewed.

Investors in the trust, which owns property now valued at $1.5 billion, complained about lack of information on executives' salaries, joint ownership of properties, board meetings and directors' payments and investments in the trust.

Keith Smith, acting chairman at yesterday's meeting, said the business was a trust and not a company so different levels of disclosure applied.

A unitholder asked why ASX-listed Goodman Group went into a trading halt yesterday.

James Hodgkinson, a director, said the trading halt was called in response to capital management initiatives but he could say no more.

A unitholder wanted an idea of what the properties were now worth, saying the trust was four months into its current trading year but both Smith and Dakin said that the next revaluations were not due to be announced until March 31, 2010.

Unitholders praised the trust for holding an open day at its $1 billion Highbrook business park in East Tamaki and asked to see more buildings. Dakin said the trust has planned more tours.

The $900 million debt deal was probably the largest refinancing move in New Zealand in the last year, he said.

The trust has the facility with ANZ, BNZ, Commonwealth Bank of Australia, Westpac and had added Kiwibank to the alliance.

Dakin said properties valued at $50 million were identified for sale during May when the trust's annual result for the year to March 31 was released.

These had not been settled yet, he said, citing the deal to quit the $21 million Southpark industrial estate in Christchurch to a syndicate which failed to raise enough funds to complete the transaction.

The trust was taking a prudent approach and would no longer develop speculative buildings which were not leased before work started, Dakin said.