Centuria acquires property platform

24 November 2016

Publication: Financial Standard
Sydney, 24 November 2016
Author: Darren Snyder

Centuria ties up 360 Capital platform in $290m deal

The evolution of funds management platforms has advanced another step following Centuria’s latest acquisition of an additional listed real estate management platform.

Centuria has agreed to acquire the majority of 360 Capital Group’s property management platform for $217 million – a transaction that will see Centuria’s property funds under management increase to more than $2.8 billion.

Centuria chief executive John McBain said the acquisition is consistent with the firm’s strategy of growing its property funds platform and an increased level of co-investment in managed funds.

“The 360 Capital property platform is complementary with Centuria’s platform as its funds under management are largely listed REITs while Centuria’s existing property business is weighted towards unlisted property funds,” McBain said.

“On completion, Centuria will have substantially greater scale positioning it for growth. Centuria now has improved capacity to raise funds in the listed REIT market, unlisted real estate funds and in Centuria itself.”

The transaction involves Centuria acquiring 360 Capital Investment Management (CIML) – manager of the 360 Capital Industrial Fund (TIX), 360 Capital Office Fund (TOF), and four unlisted real estate funds. This acquisition is valued at $91.5 million, plus $10 million in cash in support of CIML’s AFSL and net assets requirements.

It also includes the acquisition of 360 Capital Group’s (TGP) co-investment stakes in TIX (15.6%) and TOF (19.99%) for $115.8 million. Centuria has also entered into a two year put and call option arrangement over TGP’s equity interests in four unlisted funds for the sum of $59 million.

Centuria subsidiary, Centuria Property Funds Limited (CPFL), in its capacity as the Responsible Entity of Centuria Metropolitan REIT (CMA), announced it will acquire a further 8.8% of TOF from TGP, conditional on TOF unitholder approval.

The $900 million listed 360 Capital Industrial Fund (TIX) will be renamed Centuria Industrial REIT. The 360 Office Fund (TOF) will be renamed Centuria Urban REIT. Once the transaction is complete the potential exists for CMA and TOF to merge and create a sector-dominant metropolitan office REIT with more than $600 million in assets.