Bullish Goodman Group is hungry for more acquisitions Florence...

Bullish Goodman Group is hungry for more acquisitions

Florence Chong From: The Australian March 24, 2011 12:00AM

HAVING made the largest acquisition in four years in Australia's listed property sector with the takeover of the ING Industrial Fund, Greg Goodman is casting around for more acquisitions.
"We are looking for opportunities similar to IIF (ING Industrial) around the world, which is a fertile place to look," the Goodman Group chief executive said.

Other deals would likely be easier and less complicated than IIF, he said.

"We've got the capacity to make more acquisitions. We can spend billions on acquisitions -- but not on our balance sheet."

Goodman, which already held 7.1 per cent of IIF, contributed just $184 million to the $1.4 billion cash offer for all outstanding IIF units. (The consortium assumes responsibility for its $1.1bn debt)).

IIF, which was suspended from trading on Monday and is being privatised, will be renamed Goodman Trust Australia.

Goodman has a 19.9 per cent stake in GTA, while the giant Canadian Pension Plan Investment Board is the largest shareholder with 42.5 per cent.

Dutch pension group APG has 25.2 per cent and China Investment Corporation 12.6 per cent of the new unlisted trust.

Mr Goodman said 15 IIF staff would join Goodman Group, but its chief executive, Paul Toussaint, was not among them.

The focus would be to manage GTA's properties well and work on future development projects.

The trust owns 60 properties in Australia and Europe valued at $2.95bn at December 31.

In an earlier interview, Mr Goodman said GTA would be geared at about 40 per cent and it planned to sell some IIF assets over the next five years. (The life of the trust is expected to be 10 years.)

"We plan to grow the trust by development," he said. IIF, Australia's second-largest listed industrial trust, had a development pipeline with an end value of $700m.

Mr Goodman forecast the acquisition would lift Goodman Group's funds under management from $17.5bn to $20bn by the end of the year.

Goodman, one of the largest developers, owners and managers of industrial property, plans to start work on 1.5 million square metres of industrial space in China, Europe and Australia this year.

The group is due to announce several new deals soon, starting with a project in Germany today.

Asked about the likely impact of sovereign debt problems in Europe, Mr Goodman said the group expected little impact given its focus on prime, well-located assets. Its customers were large companies in strong financial positions, he said. Goodman's properties were in Germany, France, Holland and Britain, countries least affected by the European debt problems.

The group is continuing to sell assets, particularly in Asia, putting the capital into new projects.