Brickworks will unlock more of its property portfolio under a second proposed joint-venture property trust with ASX-listed industrial developer Goodman Group.
Australia’s biggest brickmaker has chalked up a record half-yearly earnings as the domestic brick market booms amid building product supply chain issues.
Managing director Lindsay Partridge said underlying profit had grown 269 per cent in six months to $330 million.
In an analyst briefing of the half-yearly results Partridge said Brickworks had been “exploring opportunities to realise value from our operational land”.
“We are now in advanced discussions in relation to a potential transaction that would include the launch of a new Joint Venture Operational Property Trust in partnership with Goodman, comprising a portfolio of properties tenanted by Building Products.
“An initial portfolio of 15 Buidling Products’ properties, with a total gross value of around $415 million, has been identified for inclusion in the first stage of the Operational Property Trust.”
Partridge said the sale and lease-back of the manufacturing sites would deliver gross cash proceeds of about $200 million, with additional properties to be added to the portfolio downstream.
Partridge said discussions on the second JV Property Trust with Goodman were progressing well and he anticipated an agreement would be formalised and transactions completed in the second half of financial year 2022. But he warned it was not set in stone.
It would be the second joint venture property trust in partnership with Goodman, with one focused on further development and utilisation of Building Products manufacturing plants, and the other focused on industrial and logistics assets for third-party customers.
A revaluation of assets in the existing JV Property Trust portfolio with Goodman led to a value 466 per cent uplift in the past 12 months, and a revaluation profit of $228 million due to ongoing demands for industrial space in the long-term move to online shopping.
The net value of property trust assets increased $349 million during the second half of 2021.
The total value of leased assets held within the Property Trust was almost $3 billion at the end of the period. The Trust also holds a further $508 million in land that is currently under development.
The construction of a state-of-the-art Amazon facility at Oakdale West reached practical completion at the end of last year, and together with the completion of Building 1C at Oakdale South, delivered development profits of $115 million in the second half of 2021.
At Oakdale West, construction of the state-ofthe-art Amazon facility reached practical completion at the end of December 2021. The completion of this facility, together with Building 1C at Oakdale South, resulted in development profits of $115 million during the period.
Strong demand off the back of the HomeBuilder stimulus package, along with critical building supply shortages has delivered the country’s biggest brickmaker a 6 per cent lift in the second half of 2021.
Brickworks is building a $130-million face brick manufacturing plant at Horsley Park in Sydney, which will produce 130 million bricks each year, and will be the most advanced brick plant in the world.
