GPT to fund Sydney CBD buyout through $800M capital raising

Written on the 19 June 2019 by Paris Faint

GPT to fund Sydney CBD buyout through $800M capital raising

GPT Group (ASX: GPT) is poised to acquire more than 100,000sqm of prime Sydney office space after it completes a sizeable $800 million institutional placement.

GPT aims to take a 25 per cent stake in the Darling Park 1 and 2 office complexes plus Cockle Bay Wharf dining and retail precinct in the CBD.

Total consideration for the CBD assets, which are already 99 per cent leased, will be $531 million.

Subsidiary GPT Wholesale Office Fund already owns a significant interest in these assets, and after the acquisition is complete the group will hold a combined 75 per cent stake.

CEO Bob Johnston says the buyout will provide greater frontage within Australia's biggest CBD market.

"Darling Park provides the Group with an enhanced exposure to the strong Sydney office market via modern, high quality assets and access to future growth through the Cockle Bay Park development," says Johnston.

"The proceeds will also be applied to funding the next stage of growth from within the Group's development pipeline across the office and logistics sectors."

This development pipeline includes a $33 million facility at Truganina in Melbourne and a $44 million asset at Wembley Business Park in Brisbane.

The Darling Park and Cockle Bay Wharf is the latest high-profile move for GPT, following its $212 million portfolio buyout of logistics assets in Sydney and its $266 million office development at 32 Smith Street in Paramatta.

Details of the equity raising

New securities will be issued at a fixed price of $6.07 at a 4.1 per cent discount to GPT's closing price on 18 June.

After the placement is complete, eligible shareholders in Australia and New Zealand will be offered an opportunity to subscribe for a further $50 million worth of shares in a non-underwritten share purchase plan (SPP).

The SPP will be offered at $5.94 per security and further information about the scheme will be released in due course.

At the time of writing, GPT shares are at $6.33 (10:07am AEST).

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Author: Paris Faint

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