The Board of Brisbane Markets Limited (BML) wishes to provide an update on some current and potential future development opportunities at the Brisbane Markets site, an update as to the annual revaluation of the site, as well as the Board’s deliberations regarding potential funding to support the ongoing growth of the company.
Multi-level Car Park and future development opportunities
BML has just commenced building a new $12 million Multi-level Car Park at the front of its Brisbane Markets site.
The car park will accommodate 540 vehicles over four levels and it will allow an existing on ground car park inside the Markets to be used for the construction of a new state of the art warehouse.
The car park will also service the weekend Retail Markets and the commercial precinct.
In addition, there are a number of other major construction initiatives currently under consideration by the BML Board, including two smaller warehouse upgrading projects, a further major solar energy installation and various site upgrading projects.
BML is also currently in the advanced stages of negotiating with a party regarding the construction of a proposed new warehouse on a site within the Markets. The design being developed is for a 4,800m² warehouse and it is expected that a final decision as to whether this project progresses will be made within six (6) months.
BML engaged LandMark White (Brisbane) Pty Ltd (LMW) to undertake an independent valuation of the Brisbane Markets site at 30 June 2017, and this work has recently been completed. This valuation by LMW will result in the Brisbane Markets property value being reported at $291 million at 30 June 2017, which represents an increase of approximately $22 million over the existing carrying value of BML’s investment property.
This valuation increment will contribute to an increase in BML’s reported Total Assets at 30 June 2017 to approximately $330 million (compared to $294.2 million as at 30 June 2016), and growth in Net Assets to approximately $145 million (compared to $120.9 million as at 30 June 2016).
A summary of the company’s financial performance for the year ending 30 June 2017 will be announced to all shareholders in September 2017 and the full details will be provided in the company’s Annual Report.
Funding and Capital
The BML Board is progressing its deliberations relating to future funding requirements given the potential for ongoing major capital expenditure projects, and the Board is contemplating the use of both debt and equity funding to progress these projects.
BML has recently secured approval for an increase in its debt finance facility with its financier, Westpac Bank to assist funding new projects as they progress. We have also taken the opportunity to extend the term of the facility, which will now expire on 30 April 2021. The Board is of the view that the company is conservatively geared and that the progressive use of additional debt over time to fund the company’s ongoing investment in predominately revenue producing assets will not detract from this position.
The Board is also anticipating that over the coming months, it may look to raise additional equity. The amount raised could indicatively be between $15 and $20 million, depending on the progress of any new projects. Shareholders will be offered an opportunity to participate as part of any capital raising activity. Any capital raising undertaken by BML may require a disclosure document and in that case, anyone wishing to participate will need to apply under the disclosure document.
The BML Board will continue to make information available if/when the proposed major projects are set to progress.
No action is required at this point in time, this advice is for information only.
Chief Executive Officer