Goodman Property Trust's portfolio of land that does not produce any income will be inflated to concerning levels through its $186.6 million bid for the remaining stake in an Auckland prime industrial estate, says an analyst.
Yesterday the listed property investor and developer posted an after-tax profit of $31.6m for the six months to September, a 9 per cent rise from the same time last year.
Chief executive John Dakin said the increase was mainly driven by extra income from recent finished developments and proceeds of $24.8m from asset sales. Net property income went up 4 per cent to $57.6m.
Goodman also said yesterday that it planned to buy the remaining 50 per cent slice of the Highbrook Business Park in Auckland's East Tamaki from investment partners Goodman Group and the Fisher family.
Morningstar Australasian head of property research Tony Sherlock said he was concerned about the acquisition given the trust's tepid revenue growth.
Of Goodman's total assets of $1.6 billion, 12.6 per cent or $196.6m was undeveloped land, not producing income, he said.
If Goodman's purchase of the remaining stake in Highbrook was successful, then it would hold $2b of assets, and 12 per cent or $240m worth of undeveloped land.
Dakin said Highbrook was a unique asset.
"It's so rare that you get a 150-hectare site smack in the middle of the city with its own motorway interchange."
The company's long-term strategy was to develop a strong portfolio of first-class assets, he said. Goodman yesterday began an underwritten private placement to institutional, wealthy and experienced investors to raise $60m of equity to part fund the acquisition.
It also was seeking $20m from unitholders who would be able to buy unit parcels with a maximum value of $15,000.