Merc makes its property play
Mercantile Mutual has made its intentions clear that it wants to be a major player in property funds management, launching a $112 million takeover bid for Heine Man-agement.
Mercantile Mutual has made its intentions clear that it wants to be a major player in property funds management, launching a $112 million takeover bid for Heine Man-agement.
Mercantile Mutual’s bid for Heine comes less than a month after AMP also made known its intention to be at the big end of town in property funds management when it purchased Schroders property business in Australia.
Mercantile Mutual managing director Rod Atfield says the bid reflects the group's strategy of offering a full range of financial services with an emphasis on building up funds management, and in particular property funds management.
The purchase of Heine will propel Mercantile Mutual into fourth position in the listed property trust sector from tenth position previously.
Ranked behind Westfield, Lend Lease and AMP and ahead of BT and Mirvac, it will have $2.5 billion of listed trust assets under management. Mercantile Mutual's posi-tion in the overall funds management sector will rise from ninth to seventh, with a to-tal of $23.4 billion gross assets under management.
"The Heine stable of investment products fits well with Mercantile Mutual and en-ables us to grow our business while also adding value for investors in the various funds," Atfield says.
Mercantile Mutual, owned by ING Group of the Netherlands, currently manages three listed, sector-specific property trusts through Armstrong Jones, its listed funds man-agement operation.
Heine's products include the listed property funds of Prime Credit Property Trust, Prime Industrial Property Trust and Prime Retail Group.
If the bid is successul, Mercantile Mutual intends to propose the merger of the re-spective Heine and Armstrong Jones office and industrial trusts. This will provide the size and resources necessary to support future growth of the funds to the benefit of
unitholders, says Armstrong Jones general manager David Blight.
But Mercantile Mutual will not pursue a merger of Heine's Prime Retail Group with its own retail fund having found an insufficient fit between the two activities.
Heine also manages three unlisted property syndicates, unlisted managed retail in-vestment funds and various mortage-based products, most of which would be inte-grated into Mercantile Mutual's operations.
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