Propertylink considers Denison portfolio ahead of float
Property funds manager and value-add property specialist Propertylink is close to inking a deal to buy the near $200 million Denison portfolio as it bulks up ahead of its initial public offering, filing documents to float early next month.
Propertylink, whose float will be anchored by a near $700 million industrial property portfolio, last month emerged as the group in due diligence on the Denison assets, with the backing of US investment bank Goldman Sachs.
The float filing confirmed the bank will exit its initial holdings in Propertylink’s successful first industrial trust. The company is seeking to raise between $496.7 million and $500.5 million by issuing up to 662.4 million shares.
Changing hands: Propertylink passes CEO baton to Stuart Dawes
The group is offering a distribution yield of 7.3% to 7.8% for fiscal 2017. The final price is to be set via an institutional bookbuild. It will be structured as a stapled security with two main elements.
First, the Propertylink Australian Industrial Partnership, which holds 33 industrial and logistic properties in major cities across Australia, with a weighting to Sydney and Melbourne markets, valued at $684.95 million.
Second, an investment and asset management business that runs nine funds, mandates and joint ventures, for global institutional investors including Grosvenor, The Norinchukin Bank, Townsend Group and Fosun.
Propertylink’s directors and management will own between 2.9% and 4.9% of the company once it has floated
About $339 million of the float proceeds will pay out existing investors in Propertylink’s first trust.
Goldman Sachs is entitled to 75% of this sum. Much of the remainder goes to British funds house Grosvenor.
Propertylink forecasts operating earnings of $53.2 million in fiscal 2017 and has ambitions to buy more industrial and logistics properties to grow its portfolio and launch new funds to grow its $1.55 billion empire.
The company has ambitions of building up its property funds empire to $2.2 billion by this time next year. However, several assets have been marketed for sale and it may need to buy new portfolios with its backers in order to hit this goal.
Joint lead managers are Credit Suisse, Goldman Sachs and JPMorgan. Baillieu Holst, CommSec and Ord Minnett are co-managers.
Propertylink’s directors and management will own between 2.9% and 4.9% of the company once it has floated and will receive annual salaries.
New chief executive Stuart Dawes will be paid $550,000 a year and co-founder and now vice-chairman Stephen Day will receive $525,000, as will Peter McDonald, the firm’s head of property. The trio are also eligible for bonuses.
Dawes could reap up to $660,000 in short-term bonuses and the other two executive directors could hit $630,000 apiece.
This article originally appeared on www.theaustralian.com.au/property.
