A round of consolidation is gathering pace in the Australian real estate investment trust sector with Centuria Capital winning the backing of an independent expert for its plans to merge two funds to form a vehicle owning more than $600 million of suburban office towers.
The property investment manager in March unveiled a plan to bring together the office funds to create a major player on the Australian Securities Exchange.
The merger of equals between the Centuria Metropolitan REIT, which owns offices and industrial parks nationally, and the Centuria Urban REIT, which owns in Melbourne and Brisbane, has been ticked off by independent expert Lonergan Edwards & Associates.
The firm found the deal was fair and reasonable to, and in the best interests of, non-associated Centuria Urban REIT investors.
The trust was originally named 360 Capital Office Fund but 360 Capital sold the trust’s management rights to Centuria in a deal finalised in January. It already ran the Centuria Metropolitan REIT.
The merged entity is set to have an investment portfolio of more than $600m and a market capitalisation of about $420m.
The independent directors said the plan offered significant distributable earnings accretion and a material increase in scale and diversification.
The new fund will also have improved trading liquidity and its increased market capitalisation offers the potential for S&P/ASX 300 Index inclusion.