Brickworks Limited (ASX: BKW) shares may be set to move higher again today as the company’s joint venture with Goodman Group (ASX: GMG) just received an important approval.
About Brickworks and Goodman
Brickworks was listed on the ASX in 1962 and has paid a dividend every year since then. The construction business has four divisions – Building Products Australia (e.g. Austral Bricks), Building Products North America (Glen Gery), Property and Investments (it owns 39.4% of Washington H. Soul Pattinson & Company).
Goodman is the largest industrial property business on the ASX and one of the largest in the world. It’s described as integrated because it develops, owns and manages property across the world. The various properties in its portfolio include warehouses, large logistics facilities (think Amazon), business and office parks.
Goodman and Brickworks have a joint venture property trust.
What Was The Approval?
Brickworks announced this morning that the Property Trust received approval from the NSW Department of Planning, Industry and Environment to commence development of the Oakdale West Industrial Estate in Sydney.
This estate covers 89 hectares and will involve building and infrastructure works.
Brickworks Managing Director Lindsay Partridge said the approval secures significant opportunities for the Property Trust which will continue for many years.
“We are pleased to secure development approval for our next Oakdale Estate, a joint venture between Goodman and Brickworks, which provides the Property Trust with a pipeline of land ready to deliver world class industrial facilities for a wide range of customers,” he said.
“The commencement of works at Oakdale West will now provide the Property Trust with significant further growth for up to a decade.”
Is Brickworks A Buy?
The Brickworks share price was up more than 6% yesterday after the release of the company’s FY19 results and this announcement may send it higher still. The development approval is important because it secures income and cash flow for Brickworks for many years.
Brickworks has a proven record and an attractive dividend yield of 3.25%, so if you haven’t considered Brickworks before, now might be a good time to have a closer look.
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Disclosure: At the time of writing, Max does not have a financial interest in any of the companies mentioned.