Commonwealth Bank makes offer to bring listed office and retail property funds in-house

The Commonwealth Bank has submitted “highly conditional” proposals to bring management of its $12 billion listed property trusts CFS Retail Property Trust and the Commonwealth Property Office Fund in-house.

Both are currently managed by the bank’s wealth arm Colonial First State Global Asset Management.

Offers to internalise both listed property trusts have been received by the responsible entity of the two funds, Commonwealth Managed Investments Limited (CMIL).

It described the offer as a “highly condition, indicative and incomplete".

A sub-committee of CMIL independent directors has been established to consider the proposal.

Approval of unitholders in the trusts is required for proposal to proceed.

“The Board of CMIL can give no assurance that the proposal or any other transaction will proceed,” said company secretary Michelle Brady.

Last week it was announced that the Pacific Retail REIT, had agreed to buy four Victorian shopping centres, worth $446.5 million from the CFS Retail Property Trust.

The Commonwealth Bank has also made a similar proposal to internalise the management of the Kiwi Income Property Trust

The Australian Financial Review notes that Commonwealth Bank is the last of the major banks to retain a direct real estate exposure following ING Macquarie and Westpac’s exit from this space.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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