Brickworks, an Australian property group and building-materials supplier, has announced plans to sell its 50% stake in one of its Sydney industrial developments to Goodman Group. The proceeds from the sale, which are expected to be around AUD117 million (USD78.8 million), will be used to lower Brickworks' debt.
The industrial development, known as the M7 Hub, is part of a larger industrial trust that Brickworks co-owns with ASX-listed property group Goodman. With the completion of this sale, Brickworks' group debt is anticipated to decrease to approximately AUD600 million.
Lindsay Partridge, the managing director and chief executive of Brickworks, explained that the decision to sell the stake was driven by the need to release funds and reduce borrowings. In recent years, Brickworks has made significant investments across the group, including the development of additional land at Oakdale East.
During the first half of its 2024 fiscal year, Brickworks continued work on its Oakdale West facility and expects to generate a development profit of between AUD40 million and AUD50 million in that period. The recent revaluation process resulted in an average capitalization rate increase to 5.0% for Brickworks' property trust assets.