Propertylink and Goldman Sachs have jointly agreed to acquire a portfolio of logistics and warehouse assets from Denison Funds Management for A$142 million as the Sydney-based investment management firm beefs up its real estate holdings in advance of its initial public offering set to happen on Friday.
Propertylink has entered into an option agreement with the Sydney-based Denison Funds Management to acquire the portfolio via its new unlisted Propertylink Enhanced Partnership (PEP). Goldman Sachs is an investor in PEP, according to a company statement. Propertylink will invest A$17.7 million in equity to the vehicle that is expected to be funded from an existing debt facility. According to the Australian press, Goldman Sachs would commit around A$53 million in total to PEP.
The group, with over A$1.55 billion of Australian assets under management, is seeking to raise A$500 million by listing on the Australian Securities Exchange (ASX), according to the prospectus lodged with the Australian Securities and Investments Commission (ASIC) in mid-July. The offer will be priced after a book-building exercise within a range, providing a pro forma forecast distribution yield of 7.3 percent to 7.8 percent for the 2017 financial year. Credit Suisse, Goldman Sachs and JP Morgan are the joint lead managers to the offer.
Commenting on the Denison portfolio acquisition, Peter Lancken, independent chairman of Propertylink, said: “The acquisition reflects Propertylink’s ability to implement its strategy of growing its investment and asset management business. The expected acquisition of the Denison portfolio will see Propertylink lock in part of its forecast assets under management growth for the FY17 forecast period.”
The acquired portfolio comprises nine logistics and warehouse assets located in New South Wales, Victoria, Queensland, and Western Australia with a weighted average lease expiry of 3.25 years. Propertylink has further said it would be investing in four more non-core properties for A$28 million from Denison via PEP “should third-party buyers, which Propertylink has identified to acquire those properties, not complete their acquisitions.”