Goodman Property Trust

[Beagle]

https://www.nzx.com/files/attachments/193790.pdf

In a market that's going sideways its time we had a good look at maximising dividend yield and providing a relatively safe haven.

My preference in this sector is Goodman Property Trust GMT. I am not a strong believer in the retail or office sector and therefore I avoid REIT's
in those sector's. I believe Goodman's industrial portfolio provides the infrastructure for many of N.Z's core business's and has sound business prospects.

Dividend pay-out forecast this year is 6.45 cents per unit. This is a portfolio investment entity (P.I.E) so tax paid by the Trust is the final tax.
At the current price of $1.07 6.45 cents per unit = 6.03% net. For an investor on a 33% tax rate this is the equilivent of 9% gross per annum.

Whilst this isn't an exceptional return in this sector what is exceptional and well worth noting is the GMT are presently paying out only 80% of their net earnings as they
grow their investment portfolio and fill up their business parks such as the one at Highbrook.

Worth noting is the changes in their structure planned - see above link.

There's presently a strong development pipeline and the un-used land bank as a percentage of their investment portfolio is reducing such that real growth in future
payouts is highly likely in my opinion.

Arguably this Trust pays an excellent dividend yield with real prospects for the best dividend growth in same in the medium term.

What's your thoughts and / or preference in this sector ?

Anyone going to the AGM of GMT tomorrow ?

[couta1]

Held them all in the past Roger my preference is first Goodman then Argosy, not keen on Kiwi or Precinct although Precinct has the lowest debt ratio of the bunch. Disc-Hold none at present

[Joshuatree]

Hi Roger , sorry to be a little off thread but curious whether you checked this out?. Biggest downside is the unlisted vehicle and possible liquidity exit probs if one needs to get out in hurry. BUT the 5 star green rated building, location, tenant , 8% yield with 3 % increase yearly for first 10 years is in its favour. GMT stacks up well but the PIE doesn't work for me.
Augusta opens door to Telecom's home

[Beagle]

Hi Roger , sorry to be a little off thread but curious whether you checked this out?. Biggest downside is the unlisted vehicle and possible liquidity exit probs if one needs to get out in hurry. BUT the 5 star green rated building, location, tenant , 8% yield with 3 % increase yearly for first 10 years is in its favour. GMT stacks up well but the PIE doesn't work for me.
Augusta opens door to Telecom's home

Hi Joshuatree,

Comparing listed and unlisted property investments is a minefield of contentious opinions and debate that I'd prefer not too unpack but just for your consideration I'll make the following comments.
First of all you need to have a look at the track record of the promoters. Chris Lee has had some less than complimentary things to say about Augusta and their track record with Kermadec is anything but stellar. The Francis family overall track record is something people need to decide for themselves if they're comfortable with.
Secondly you need to form you own opinion of whether their projections in a rising interest rate environment are credible, (worth noting that some promoters use a fair bit of leverage and lock in short term funding which is cheaper than locking in long term funding and thus makes their short term yield projections look attractive...what happens to net returns when they have to re-finance short term debt at higher interest rates ?).
You also need to consider lease termination risk by a single tenant on a single property at the end of the term of the lease and how attractive the property is in regard to other corporations in the future ?
You might ask yourself why risk your investment on a one building one tenant investment that's very illiquid compared to a broadly diversified portfolio of industrial buildings that has good liquidity and easy entry and exit with low brokerage rates. Sometimes people get sick or need to liquidate their investment for a vast range of other potential reasons...why go there for a slightly higher perceived return ?
Have a look at the costs to get out if you want too, can you ?
DYOR and be very, very careful. My 2 cents.

[Beagle]

Held them all in the past Roger my preference is first Goodman then Argosy, not keen on Kiwi or Precinct although Precinct has the lowest debt ratio of the bunch. Disc-Hold none at present

Pretty much my preference order too. Interestingly Argosy pay 6 cps this year which is a slightly lower dividend yield based on their SP of $1.005 but are digging into distribution reserves to maintain that whereas GMT are only distributing 80% of distributable profit, (something I thought the market would have picked up by now).

The situation is similar over at KIP with their projected distribution of around 6.5 cents based on a SP of $1.17 = tax paid yield of only 5.55% but they're also sailing very close to the wind with distributing all of available after tax profit and making noises about having to dig into reserves to maintain it due to a major redevelopment of one of their larger building's commencing Nov 2014.

As GMT's Highbrook park fills up they're targeting land at 5% of their NAV their ability to payout increased divvy's is strong based on higher rental returns from previously unoccupied land and a change in the payout ratio According to Bing finance GMT has a beta of only 0.48 so volatility is low.
Disc I hold plenty.

I ran the ruler over Vital Healthcare Trust as a possible diversification strategy a little while back. Yield was lower and trading at a substantial premium to NTA. Low risk due to very long leases on properties in the healthcare sector but SP appears vulnerable to a pull-back in a rising interest rate environment.

[Onion]

I ran the ruler over Vital Healthcare Trust as a possible diversification strategy a little while back. Yield was lower and trading at a substantial premium to NTA. Low risk due to very long leases on properties in the healthcare sector but SP appears vulnerable to a pull-back in a rising interest rate environment.

I have some VHP. I was attracted to the exposure to Australia and they have a very long average lease term. I have always had some doubts about VHP's management. It's manager (NorthWest Value Partners) and biggest shareholder are linked and I have never quite made up my mind whether that creates a conflict (i.e. they get the return from managing the trust even if the returns are not great for the rest of the shareholders).

[fungus pudding]

https://www.nzx.com/files/attachments/193790.pdf

In a market that's going sideways its time we had a good look at maximising dividend yield and providing a relatively safe haven.

My preference in this sector is Goodman Property Trust GMT. I am not a strong believer in the retail or office sector and therefore I avoid REIT's
in those sector's. I believe Goodman's industrial portfolio provides the infrastructure for many of N.Z's core business's and has sound business prospects.

Dividend pay-out forecast this year is 6.45 cents per unit. This is a portfolio investment entity (P.I.E) so tax paid by the Trust is the final tax.
At the current price of $1.07 6.45 cents per unit = 6.03% net. For an investor on a 33% tax rate this is the equilivent of 9% gross per annum.

Whilst this isn't an exceptional return in this sector what is exceptional and well worth noting is the GMT are presently paying out only 80% of their net earnings as they
grow their investment portfolio and fill up their business parks such as the one at Highbrook.

Worth noting is the changes in their structure planned - see above link.

There's presently a strong development pipeline and the un-used land bank as a percentage of their investment portfolio is reducing such that real growth in future
payouts is highly likely in my opinion.

Arguably this Trust pays an excellent dividend yield with real prospects for the best dividend growth in same in the medium term.

What's your thoughts and / or preference in this sector ?

Anyone going to the AGM of GMT tomorrow ?

Any need to start a new thread?

http://www.sharetrader.co.nz/showthr...roperty-Trusts

[Beagle]

Opps, forgot there was another thread. Lets make this one a specific to GMT then. Can one of the mods please change the thread title to Goodman Property Trust.

[Joshuatree]

Thanks for your opinion Roger. we both agree re the vehicle and poss exit difficulties. I wasn't aware of Augusta's track record. The carrot is the five star building, location tenant etc but yes single building risk and small print need a thorough work over and the 8% yield suggested has lots of wiggle room downward.Also min invest $50,000. cheers JT

[RRR]

Roger- have you considered the fact that new shares will be issued to the promoters since settlement of highbrook buyout was deferred by 2 years(I can't remember the exact arrangements)? I like them but sold out recently! I still like GMT but believe there is a conflict of interest due to being not internally managed!

I like ARG and hold a few. Planning to add more!

I sold VHP - I just don't trust Northwest and we missed the opportunity to buy back the management right few years ago when investors had the chance!