Highlights

  • Agreement announced to sell remaining industrial properties to a managed property fund for about $300m
  • Gross proceeds from all nine investment properties expected to reach $350.8m
  • Expected surplus cash of $176.6m and investable capital of about $321m
  • FY27 FFO guidance raised to 12.5 cents per security from 10.5 cents
  • FY27 distribution guidance raised to 12.5 cents per security from 9 cents

Garda Property Group (ASX:GDF) is a Queensland-focused property investment and real estate lending group. It announced agreements to sell its seven remaining investment properties to a property fund for about $300m, with proceeds intended to support its shift towards lending. The group also revised its FY27 financial guidance.

Completing the Property Exit

The announced transaction covers the seven remaining investment properties, while earlier sales included Heathwood and Pinkenba. Garda expects gross proceeds of $350.8m across the nine-property portfolio. Settlement of the remaining sales has not yet occurred.

The agreement includes industrial properties in Brisbane precincts such as Acacia Ridge, Wacol and Morningside. Settlement timing varies by asset, with the Morningside contract still subject to due diligence.

Where the Capital Goes

Garda stated that proceeds will be used to repay its syndicated debt facility, which was drawn to $185.3m at the latest reporting date. After settlement of all nine sales, the company expects surplus cash of $176.6m.

Together with $144.4m of existing loan receivables, ASX:GDF reports about $321m of investable capital. Garda stated that surplus capital will be directed toward real estate lending for the foreseeable future, while it may still own or develop property where appropriate. The capital-allocation plan outlined by Garda Property Group (ASX:GDF) depends on settlement of the contracted disposals.

Raised FY27 Guidance

Alongside the sale, Garda (ASX:GDF) raised FY27 funds from operations (FFO) guidance by 19% to 12.5 cents per security, from 10.5 cents. Distribution guidance rose by 39% to 12.5 cents per security, from 9 cents.

The company indicated it intends to distribute substantially all FFO, targeting a payout ratio of about 100%. These figures are company guidance, not confirmed results.

Key Insights

The ASX:GDF announcement confirms an agreement to dispose of the remaining seven directly held industrial properties and an intention to concentrate on real estate lending. The proposed $300m transaction, the anticipated proceeds across nine properties and the planned debt repayment are disclosed, but completion of the sales remains outstanding.

Other elements depend on future events. Settlement of each sale, including the contract that remains subject to due diligence, the deployment of surplus capital into loans and the FY27 FFO and distribution figures are company expectations. A lending-focused model depends on borrower performance and loan origination, which the announcement does not quantify beyond the figures above.

A portfolio of seven industrial investment properties, under agreements valued at about $300m.