The Arlington Business Park Partnership (ABPP), a specialist UK fund set up in 2003 by Goodman Group and Legal & General Property, is expected to be wound up within the next 12 months.
Greg Goodman, CEO of the Sydney-headquartered company, told IPE Real Estate: “We have held [the assets] for a long time. The partnership has performed very well, certainly in the last three to four years, but now the partners have decided to go their own ways.”
The fund, which buys, develops and manages business parks in UK regional and urban-fringe office markets, was worth £1.1bn (€1.28bn) at its peak and is now understood to be close to half that value.
Goodman told analysts and investors during its full-year results announcement this week that AUD$237m (€164m) of ABPP assets were sold during the 12 months leading up to 30 June 2016.
He told IPE Real Estate separately that half of the assets had already been sold, but the partnership is continuing with development work. Currently, 100,000sqft of turnkey development is under negotiation.
Asked if the assets would be sold to existing partners in ABPP, Goodman said: “We will take the best price.”
Goodman said the UK vote to leave the European Union did not trigger the decision, which was made two years ago. “We decided then that we were going to be more opportunistic in regard to land and development in the UK”.
Last October, Goodman brought Canada Pension Plan Investment Board (CPPIB) and APG into its new billion-pound-sterling Goodman UK Logistics Partnership.
“We think that over the next 12 to 18 months – and depending on customer demand and the UK economy – there will be opportunities. We have a lot of equity and we are able to finance projects in office-park or industrial developments,” Goodman said.
“We are mindful that the market has been pretty fully priced, and that we need to eke out value.”
For a fifth year, he said, the group had been the largest logistics developer in Europe.
“We will have another strong year this year. Good customers – whether BMW, Amazon or Carrefour – continuously look for efficiency in their supply chain. They want good locations to be bullet-proof for the future,” he said.
“So there is a lot of good business to be done in regard to helping customers drive more efficiency in their business, whether in Europe, Asia or Australia.”
Goodman said the group would focus on the United States and Australia, particularly Sydney, which he said, offers the best prospects for growth.
Currently, 12% of Goodman’s AUD3.4bn work-in-progress investments are located in the US, with 22% in Australia and the rest in Europe and Asia.
“The group and its partnerships have opportunities worth $10bn over the next 3 years,” he said.
Goodman announced an operating profit of AUD715m – up 9% over the previous corresponding period – and forecast 6% earnings growth in the 2016-17 financial year.