Australian brick manufacturer Brickworks and commercial property company Goodman Group have established a joint venture, Brickworks Manufacturing Trust, which will be comprised of a portfolio of 15 manufacturing plants.
The brick maker will own 50.1 per cent of the new trust’s shares, while the remaining will be sold to Goodman.
The 15 initial sites in the trust comprise 496 hectares of land, amounting to a total of $416 million. Approximately 38 per cent of the properties will be located in Queensland, 36 per cent in Victoria, 14 per cent in Western Australia, 6 per cent New South Wales, 5 per cent in Southern Australia, and 1 per cent in Tasmania.
The $416 million gross value of the new trust’s assets represents a premium of $280 million to the current book value of the assets.
The properties’ sale will generate a $207 million contribution to Brickworks, representing 49.9 per cent of the asset value. Around $193 million worth of net proceeds is expected after allowing for tax, duty, and transaction costs.
“The partial sale and lease back of these properties will deliver significant cash proceeds, allowing Brickworks to realise value for shareholders and capitalise on the strong growth in industrial land values over the past few years,” said Lindsay Partridge, managing director for Brickworks.
“Importantly, the lease terms have been structured to ensure minimal impact to the operational flexibility of our Building Products businesses, which will continue to operate on these sites.”
The new trust is part of Brickworks’ property strategy and the partnership with Goodman will allow it to actively manage several properties that have the potential for additional development and greater utilisation, Partridge added.
