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Goodman Wholesale Plans to Sell A$250 Million of Commercial Mortgage Notes
A fund managed by Goodman Group, Australia’s biggest industrial real estate investment trust, plans to sell A$250 million ($227 million) of commercial mortgage bonds to Challenger Financial Services Group Ltd.
The notes will replace a loan that Challenger provided to the Goodman Australia Industrial Fund in May, Challenger’s head of fixed interest Bob Sahota said in a telephone interview from Sydney today. Challenger and clients it manages money for will own all of the securities, he said.
“The commercial real estate lending market is where we see the best risk-adjusted return,” said Sahota, who helps manage A$4.5 billion. “We look forward to doing more deals like this.”
Property agents including Jones Lang LaSalle Inc. and CB Richard Ellis Group Inc. are seeing an increase in demand for warehousing space as Australia’s economy, which skirted recession during the global credit freeze, expanded at the fastest pace since 2007 last quarter. Goodman’s notes are backed by loans on 24 properties including warehouses and distribution centers, business parks and industrial estates in the states of New South Wales, Victoria and South Australia, Standard & Poor’s said in a statement today.
The ratings firm gave its highest AAA grade to the top class of notes.
Goodman Group spokesman Mathew Werner confirmed the planned sale of the notes, and said he wasn’t immediately able to comment further.
Goodman will “continue to explore a range of capital sources and opportunities to diversify its debt platforms and lengthen the term of its debt maturities,” the company said when it reported full-year earnings last month.
To contact the reporter on this story: Sarah McDonald in Sydney at smcdonald23@bloomberg.net.
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