Overseas investment decision for case 200720075 - Goodman Property Trust

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Background to the Investment:
As part of its New Zealand property portfolio, Goodman Group currently holds a proprietary interest in the Highbrook Business Park development (via its shareholding in Highbrook Development Limited). Goodman Group and Goodman Property Trust (GMT) have agreed to reorganise the ownership structure of this interest. In general terms, Goodman Group proposes to transfer to GMT 50% of its interest in Highbrook Business Park. Subsequent to this transaction, Goodman Group's exposure to the Highbrook development will be a direct holding of 25% and an indirect interest of 50%, arising through its unit holding in GMT. Goodman Group's interest in GMT will likely increase by virtue of a capital raising exercise to be undertaken by GMT (in the form of a placement, institutional and retail entitlements offer and retail offer) (the Capital Raising). GMT's intention is to deploy this capital to help finance the acquisition.

Outline of the Proposed Investment:
GMT seeks consent to purchase 50% of Goodman Group's interest in Highbrook Development Limited (HDL) (by acquiring 100% of the shares in Goodman Highbrook Limited).

Rationale for the Proposed Investment:
Goodman Group wishes to rationalise and consolidate its New Zealand property portfolio. Its future investments in the industrial and commercial property market will be through its unit holdings in GMT. GMT believes that the proposed Transactions represent an opportunity for it to significantly grow its New Zealand property portfolio from approximately $1.3 billion to $1.6 billion. In particular, the proposed transactions will improve GMT's weighted average lease expiry from 5.6 years to approximately 5.9 years and will introduce high quality customers to GMT's portfolio.

The land acquisition component of the proposed Transactions will be paid for by GMT through a combination of cash payments (funded through GMT's debt facilities) and unit issues to Goodman Group. It is envisaged the Capital Raising will increase GMT's market capitalisation to a point where it is expected to be the largest listed property trust on the New Zealand Stock Exchange (NZSX). This increase is likely to raise investor awareness of GMT and enhance trading liquidity in GMT units.

The acquisition is part of the Applicant's strategy to secure an increased grape supply and long-term strategy to become a leading producer of fine wines within the local and worldwide markets.

The proposal is likely to result in the following benefit:

1. by allowing the Applicant to substantially grow its property portfolio in New Zealand, the transactions (and the developments undertaken pursuant to them) will result in the Applicant becoming one of New Zealand's largest property investors. In turn, this will create a platform for the Applicant to carry out further investment in New Zealand; and
2. the transactions will benefit New Zealand's construction industry (Highbrook Business Park will require significant and ongoing development and construction), promote competition within New Zealand's commercial and industrial property sector and generate new employment opportunities.