Surprise new NZX listing in $250m IPO: Fabric Property planned to trade from next month
A new property company is planned to be listed on the NZX and begin trading in less than a month, conditional on a $250 million initial public offering.
In a surprise statement to the market today, Stride Property Group said it was planned for the new Fabric Property to begin trading on October 6, seeking to raise $250m and specialise in the office sector.
The public will only able to buy through brokers and the deal is conditional on that $250m being raised by Fabric and the demerger from Stride Property occurring.
Stride said Fabric was now a wholly-owned subsidiary. It would be separately listed but still managed by its Stride Investment Management.
Fabric owns 10 office buildings in Auckland and Wellington and has struck an agreement to buy a Newmarket property from Mansons TCLM.
That is One Ten Carlton Gore Rd in Newmarket. Engineering, design and advisory company Aurecon has taken a 12-year lease on lower floors of that block, now coming out of the ground.
Philip Littlewood, Stride chief executive, told the Herald the Newmarket building would be purchased for $217.5m due to settle in February 2023.
He said the new listing was not a complete surprise because Stride announced in May that it would establish a new office fund on the NZX this financial year.
Stride established Fabric as a subsidiary last November, it announced.
Stride shareholders will get one share in Fabric for every four they own in Stride and own about a quarter of the company once the offer is done. In addition, Stride will also hold a stake in Fabric of between 25 per cent and 32 per cent.
"The demerger and the creation of a new Stride product in the form of an NZX listed office fund is a continuation of Stride's strategy of creating sector-specific products managed by Stride Investment Management to provide a differentiated investment opportunity for investors," it said.
Stride already manages Diversified NZ Property Trust, a wholesale property fund that owns four retail shopping centres as well as Investore Property, an NZX-listed entity that owns large-format retail assets and Industre Property which owns a portfolio of industrial buildings.
Assets include Massey's NorthWest shopping centre, Lower Hutt's Queensgate which is being rebuilt and Deloitte House at 215 Lambton Quay, Wellington as well as Waste Management's headquarters in East Tamaki. Stride won the Property Council's supreme aware for that development last year.
Stride already has about $3b assets under management, earns an annual income fee of $25.1m (last year $6.8m) and said in May it had done particularly well.
Permission has been sought from the NZX to list Fabric on the main board.
"Members of the public wishing to subscribe for offer shares must be allocated shares by an NZX firm under the broker firm offer, or must be offered offer shares under the Stride shareholder offer," today's announcement said.
The offer will be made to institutional investors, existing investors in Stride and to new investors via the brokers.
Goldman Sachs NZ is the arranger and bookrunner. Craigs Investment Partners, Forsyth Barr and Goldman Saches NZ are lead managers.
A product disclosure statement and other details on the offer is now available at www.shareoffer.co.nz/fabric
That site says the product disclosure statement is lodged.
The institutional and bookbuild process will be next Tuesday. Settlement and allotment of shares will be on October 5 and trading is expected to start the next day.
Stride shares are today trading at $2.62, giving it a market cap of $1.2b.