Property group GPT to raise $850M for Sydney office complex

• GPT has launched a $850 million capital raising plan to fund the purchase of an office complex in Sydney and future growth opportunities
• The capital raising is made up of an $800 million placement and a share purchase plan to raise an additional $50 million
• Funds will be used to purchase a 25 per cent interest in the Darling Park 1 and 2 office complex and Cockle Bay Wharf in Sydney for $531 million, and to fund the next stage of growth for the company’s development pipeline
• The purchase will give GPT a combined 75 per cent interest in the Darling Park 1 and 2 and Cockle Bay Wharf Complex with GPT Wholesale Office Fund

GPT Group has launched an $850 million capital raising plan to fund the purchase of an office complex in Sydney.

The capital raising is made up of two components: a fully underwritten $800 million institutional placement and a non-underwritten share purchase plan to raise an additional $50 million.

Shares issued under the placement will be priced at $6.07 per share, which represents a 4.1 per cent discount to the company’s previous closing price of $6.33 per share. Under the share purchase plan, eligible shareholders will be able to subscribe for up to $15,000 worth of shares at $5.94 per share — the placement issue price adjusted for the June 2019 distribution of 13.11 cps.

GPT has proposed using the funds to purchase a 25 per cent interest in the Darling Park 1 and 2 office complex and Cockle Bay Wharf in Sydney, for $531 million. Once the purchase is completed, GPT will hold a combined 75 per cent interest in the Darling Park 1 and 2 and Cockle Bay Wharf Complex with GPT Wholesale Office Fund (GWOF).

Darling Park 1 and 2 is home to a 103,600 square metre area across two 27-level office towers. Cockle Bay Wharf holds 8151 square metres of dining and retail space. GPT has highlighted key metrics of the purchase, including a blended capitalisation rate of 5.04 per cent, an initial yield of 5.3 per cent, and a Weighted Average Lease Expiry of 5.2 years.

Furthermore, the purchase will also give GPT a 25 per cent interest in the proposed Cockle Bay Park development. The development has recently received Stage 1 planning approval and will contain roughly 63,000 square metres of office space and 10,000 square metres of retail and entertainment space.

GPT CEO Bob Johnston said this was a compelling investment opportunity for the company.

“Darling Park provides the group with an enhanced exposure to the strong Sydney office market via modern, high quality assets and access to future growth through the Cockle Bay Park development,” Bob said.

He added that funds from the capital raising will also be used to fund the next stage of growth for the company’s development pipeline, which includes developments at Truganina in Melbourne and Wembley Business Park in Brisbane.

GPT shares a currently in a trading halt following the announcement of the capital raising. The previous closing price of shares was $6.33 per share in a market cap of $11.42 billion.