Building products company, Brickworks (ASX:BKW):
announced the launch of the Brickworks Manufacturing Trust, a new Joint Venture manufacturing property trust with Goodman Group.
This seems like a ripper deal for Brickworks. What are the details of the joint venture?
Brickworks will retain 50.1% ownership of the new trust, with the remaining 49.9% interest sold to Goodman.
Brickworks and Goodman already have a joint venture property trust called, the Industrial Trust. Which houses third-party tenants such as, Amazon (NASDAQ:AMZN), Coles (ASX:COL), Woolworths (ASX:WOW) and Australia Post.
The new trust will be:
tenanted by Brickworks' operating businesses, such as Austral Bricks, Bristle Roofing, Austral Masonry and Austral Precast, with long duration leases of 5-20 years …
How much will Goodman pay?
$207 [million] … represent[ing] a $280 million premium to the book value of the assets …
Brickworks will walk away with, $193 million in net cash proceeds, but only a $74 million uplift to net assets due to way accounting allows them to report the profit.
Overall, a really great way to unlock value from Brickworks, while retaining control of their properties and re-positioning its existing assets and now income producing property assets.
The accompanying Investor Presentation has a great overview of their property portfolio.
Share price has been smashed recently, with rising interest rates and energy prices. However, looks interesting as a long-term compounder.