- Brick manufacture Brickworks (BKW) launches the Brickworks Manufacturing Trust, a new joint venture with commercial property company Goodman Group
- The trust will hold an initial portfolio of 15 manufacturing plants with an asset value of $416 million
- Additionally, Brickworks is expecting to report record property earnings in FY22, with property earnings before interest and taxes (EBIT) in excess of $620 million
- This is a big jump from FY21’s property EBIT of $253 million
- BKW shares are up 2.09 per cent and are trading at $20.55 each at 1:51 pm AEST
Brick manufacture Brickworks (BKW) has launched the Brickworks Manufacturing Trust, a new joint venture with commercial property company Goodman Group.
The trust will hold an initial portfolio of 15 manufacturing plants with an asset value of $416 million.
The properties will be tenanted by BKW’s operating businesses, which include Austral Bricks, Bristle Roofing, Austral Masonry and Austral Precast.
Brickworks will retain 50.1 per cent ownership of the new trust, with the remaining 49.9 per cent interest being sold to Goodman.
“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,” Managing Director Lindsay Partridge said.
“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.”
Additionally, Brickworks is expecting to report record property earnings in FY22, with property earnings before interest and taxes (EBIT) in excess of $620 million. This is a big jump from FY21’s property EBIT of $253 million.
Mr Partridge said the record was driven by major developments and changes to account polices.
“During the second half of the financial year, we have made strong progress on a number of major developments within the Industrial JV Trust. At Oakdale West, new facilities for Coles, Woolworths, Australia Post and Telstra are all approaching practical completion,” he said.
“In a change of accounting policy, and consistent with our JV partner Goodman, we now recognise developments within the Trust at fair market value, if they are approaching practical completion, at the end of each period.”
On the market, BKW shares were up 2.09 per cent and trading at $20.55 each at 1:51 pm AEST.