Asian private equity firm emerges as possible Australand buyer: reports

Hong Kong-headquartered private equity firm Barings Private Equity Asia is being mooted as a possible bidder for all or part of the Australand business.

The firm has $5 billion under management with offices in Shanghai, Singapore, Beijing and Mumbai and was once part of Dutch banking giant ING.

It is understood to be considering acquiring just the residential business of Australand or putting in a bid for the entire company, including its industrial, retail and office businesses and assets.

Barings Private Equity Asia describes its activities as running “a pan-Asian investment program, specialising in mid-market companies requiring capital for expansion, recapitalisation or acquisitions”.

The firm is said to be more interested in Australand’s residential unit, which could generate returns in excess of 15% with premium Australand commercial and industrial assets expected to generate a smaller return, according to a report in the Australian Financial Review quoting “senior sources”.

Australand’s main shareholder, Singapore-based CapitaLand, which controls 59% of Australand, said in January it was reviewing its investment in the Australian developer as it focuses its efforts on its China and Singapore businesses.

However, it is believed to strongly favour selling the entire business rather than selling it piecemeal.

In March Australand said in an ASX statement that “several parties have expressed an interest in either the whole or parts of the Australand business.”

A $7 billion approach by Mirvac for Australand’s residential business has also been mooted, but no formal bid has yet been acknowledged by Australand.

A $3 billion bid by the GPT Group for Australand’s commercial and industrial businesses at a $140 million premium to their book value was rejected in December.

If a suitable bidder for Australand cannot be found, CapitaLand may also consider selling its shareholding via a block trade, an off-market trade allowed for share holdings of significant size in specified contracts.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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