Centuria Capital in drive to create $1bn fund

25 May 2016

Publication: The Australian Date: 25 May 2016 Author: Ben Wilmot

THE AUSTRALIAN |  MAY 25, 2016  12:00AM


Nick Collishaw
Former Mirvac chief Nick Collishaw now leads the Centuria Metropolitan REIT. Picture: Nikki Short

Centuria Capital and its listed property vehicle, which have bolstered their holdings in the GPT Metro Office Fund to 16.1 per cent, yesterday unveiled a cash-and-scrip takeover bid that would see them put their listed property empire on the road to a $1 billion fund.

Centuria, which has former Mirvac chief Nick Collishaw leading its Centuria Metropolitan REIT, a $397 million office and industrial trust, will seek to combine the portfolios of that fund and GPT Metro to create a vehicle with about $850m worth of properties across Australia.

It flagged making a $2.46-a-unit offer for GPT Metro, pitched above rival Growthpoint Properties Australia’s offer of $2.41.

Centuria, with the aid of Moelis & Co, last week raided the listed landlord’s register, securing stakes in the trust, and yesterday argued its scheme presented a superior offer to Growthpoint’s cash and scrip offer.

The stake Centuria has won also means Growthpoint’s scheme is unable to be completed in its present form and may seek to return with a takeover bid. It declined to comment yesterday.

Forming a large-scale trust would pave the way for it to enter major property indices, put it on the radar of more institutions, and give Mr Collishaw the backing to re-emerge as a player in larger scale properties at a time of fewer specialist trusts.

Mr Collishaw, chief executive of listed property at Centuria, said the group had a deep understanding of Australia’s metropolitan real estate markets and close ties to the retail investor community.

The plan also offers material earnings accretion to GMF unit holders, estimated to be greater than 20 per cent for fiscal 2016.

By contrast, Growthpoint’s merger plan would give shareholders in the GPT fund exposure to industrial assets and leave that group’s South African parent in a controlling position.

“We believe the combination of the CMA and GMF portfolios best meets GMF unitholders’ expectations of underlying asset quality and return profile. We expect the combination of these highly complementary property portfolios to improve the long term investment outcomes for the unitholders of both, while also maintaining or improving existing earnings,” Mr Collishaw said.

Centuria’s holdings in the GPT fund are split between parent Centuria Capital, with 12.6 per cent, and Centuria Metropolitan REIT, with 3.5 per cent.

Centuria Capital chief executive John McBain said the firm was now the largest individual investor in both GMF and CMA and had a strong interest and focus on creating value for both investor bases. “This is a material initial investment for Centuria Capital which will ensure we maintain that focus,” he said.