C’wealth, Colonial and Gandel property trusts propose merger
TheColonial First StateProperty Trust Group will be taking to its unit holders a proposal for the group to merge with theCommonwealthProperty Office Fund and Gandel Retail Trust.
If approved, the merger will result in the formation of two property trusts, the CFS Gandel Retail Trust and Commonwealth Property Office Fund.
Under the proposal, the Commonwealth Property Office Fund and Gandel Retail Trust will acquire all four trusts which comprise the Colonial First State Property Trust Group.
The Commonwealth Property Office Fund will acquire three of the four, while the Colonial First State Retail Property Trust’s $647 million in assets will go to Gandel.
For Gandel, the deal will effectively provide the company with an interest in eight sub-regional shopping centres located in Queensland, South Australia, Western Australia and Victoria, and will increase its assets under management to $2.8 billion.
Meanwhile, Gandel will establish a new entity, Gandel Retail Management, of which it will own 40 per cent, with the remaining portion owned by CFT. Gandel says this will position the company as one of the largest retail property managers in Australia, with $5 billion of retail assets under management.
For Commonwealth Property Office Fund, the purchase of the three Colonial trusts will give it a $1.2 billion portfolio of office, industrial and high tech industrial office properties. The Commonwealth Property Office Fund will emerge from the deal as the largest office trust in the listed property trust sector, with total assets of approximately $2.1 billion and an estimated market capitalisation of approximately $1.6 billion.
According to a news release issued by Colonial, the Commonwealth property fund’s plan is to divest the $451 million industrial and high tech industrial office portfolios acquired as part of the proposal over time, which it says will provide it with a future source of funds to acquire office property.
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