In Australia, Goodman Australia Industrial Fund refinanced $450...

In Australia, Goodman Australia Industrial Fund refinanced $450 million in debt representing the first tranche of GAIF's $1.6 billion bank syndication facility, launched in March 2008.

The refinancing had been well supported by the Group's existing banking relationships, Goodman said.

The new debt has maturities over two and three years, with pricing "in line with current markets".

Goodman said the refinancing increases the Fund's average debt duration from 1.6 years to 2.2 years with the next maturity not due until March 2010.

Portfolio metrics remain solid, with occupancy of 98% in the property investment portfolio and a weighted average lease expiry of 4.3 years providing around 70% of EBIT. In the managed fund portfolio, occupancy is 95% with a weighted average lease expiry of 6.9 years.

Following property revaluations, the average Australian capitalisation rate only weakened around 15bps to 7.2%, contributing to headline gearing rising from 39.9% to 41.2% and wiping out the benefit of last year’s capital raising. NTA, excluding $1.29bn of goodwill and management rights, has fallen to $1.05pu post capital raising. Total borrowings were $4.1bn, of which only $460.0m is still to be refinanced in FY09 with a manageable $648.5m to be refinanced in FY10. Management has focused on asset sales to reduce debt, though these will have to be at increasing discounts in future to achieve prompt realisation given that the alternatives of a discounted equity raising or distribution cut are even less appealing.