Real estate developer and fund manager, Goodman Group (GMG) said today it has sold its 40% share of a joint venture management firm in Singapore and a 6.8% stake in the Singapore-listed real estate investment trust.
Goodman said it will use the proceeds from the sale to repay debt, which will reduce gearing by around 150 basis points.
“We are confident that the experience that we have gained in the market, coupled with the relationships we have built with our global customers and investment clients, will provide us with an opportunity to re-enter the market over time,” chief executive officer Gregory Goodman said.
The joint venture with Ascendas was formed in 2002 and assets under management are said to have grown from $S545 million to over $S3.4 billion.
In effect, Goodman is selling its stake in the entity that manages A-Reit (Ascendas- Real Estate Investment Trust) as well as the 6.8% stake in the trust itself.
The Sydney-based firm said the profit from the sale of the joint venture firm is in excess of S$90 million and the profit on the 6.8% stake is in excess of S$60 million pre-tax.
“These profits will be over and above operating income for the group which is forecast to be 34 cents per share for financial year 2008,” Goodman said.
In exiting its involvement with the REIT, Mr Goodman told the Singapore Business Times, “our approach is that we prefer to have full control of any Reit manager we’re involved with, and that’s not possible in this case. ”
Last month, Goodman reported a 5.8% fall in first half net profit, but maintained its full year earnings forecast.
Stapled securities of Goodman Group closed 1 cent higher at $3.71.
