CapitaLand to retain majority stake in Australand ahead of half-year results announcement

Singapore-based CapitaLand will retain its 59% stake in listed property group Australand after failing to secure a “sufficiently compelling” offer.

The announcement comes just a day before Australand releases its half-year results and a day after there was speculation in the Fairfax press that Stockland may make a bid for Australand.

Australand's share price had soared from around $3.20 in mid-June to close at $3.61 yesterday.

However it fell to $3.49 in early trading following the announcement.

Australand issued a statement to the ASX yesterday notifying the market that the process of seeking a buyer had concluded and that indicative proposals had been received from “various parties for all and parts of the business which commenced in early 2013”.

“However, no proposal was able to be developed that was superior to business as usual,” said Australand.

It added that CapitaLand would continue to receive a “steady stream of recurring income” from Australand’s from its commercial and industrial properties, its industrial development business and would benefit from “the improved outlook for the residential sector in key Australian cities”.

A statement submitted by CapitaLand noted that indicative proposals had been received but none were "sufficiently compelling".

Bidders for parts of Australand included GPT, which had its $2.8 billion bid to acquire Australand’s investment property portfolio and commercial and industrial businesses rejected in December.

GPT withdrew its interest at the end of May as did US private equity giant Blackstone.

Mirvac was also tipped as a possible buyer - though this was never confirmed.

A block share trade of CapitaLand holding was also mooted.

The Australian Financial Review's Street Talk column reported that Perth-based residential developer the Satterley Property Group was interested in acquiring Australand's WA and Victorian residential land assets.

Hadley Green Investment Group director Mark Wist commented to Property Observer that the combination of an investment portfolio and a residential property development business would not have appealed to a wide range of potential providers - hence interest amongst interested parties in only acquiring parts of the Australand business.