Will GPT now turn its attention to making a firm, higher offer for the investment, commercial and industrial property assets of Singapore-controlled Australand after selling its half share in the Erina Fair shopping mall on the NSW central Coast for $397 million?
The sale will generate some handy cash for GPT as it contemplates its next move in the Australand negotiations which stalled over the recently resolved class action against the giant. (That was settled for $75 million.)
GPT made the sale as part of getting a more even balance to its retail, office and industrial portfolios (Stockland is looking to do the same.)
Its 50% interest in Erina Fair was sold to a client of Lend Lease Investment Management at a 1% premium to its value as of December 2012. That client is believed to be the National Pension Fund of South Korea.
Lend Lease’s Australian retail property fund owns the remaining half interest in Erina Fair. (GPT traces itself back to being a part of Lend Lease.)
CEO and Managing Director Michael Cameron said in yesterday’s statement that GPT had capitalised on the strong interest from domestic and overseas investors in quality Australian property assets.
“This solid demand has allowed GPT to realise the value of this asset and continue to progress its strategy to move to a more balanced portfolio weighting,” Mr Cameron said.“In the past year we have effectively executed this remixing strategy moving retail from 61 per cent of the portfolio to 54 per cent, inclusive of this latest transaction.
"We continue to investigate further opportunities for investment in Office and Logistics & Business Parks.”
Now it can look at the Australand transaction which would achieve that reweighting in one big deal.
GPT had been expected to make a higher offer for Australand in February after its annual results were published. GPT’s December bid of $2.8 billion was $140 million above the June 2012 book value for the assets, but would leave Australand shareholders holding the residential business as a stand-alone entity.
Singapore’s CapitaLand, which controls Australand, undertook a strategic review of its investment in Australand in January last year. The possible sale of the assets was mooted in the wake of the review.
GPT units closed yesterday at $4.17, up 5c, or just over 1%.
GPT – +30% In 12-Months
