Dexus acquires 14.9% of Commonwealth Office Property Fund as big players circle

Listed commercial property trust Dexus has acquired a 14.9% investment in the Commonwealth Office Property Fund.

The fund holds prime-grade office assets worth $3.7 billion, including a 50% share of  the premium grade 5 Martin Place office tower in Sydney, due for completion in 2015, with law firm Ashurst to occupy 44% of the 31,000 square metres of office space.

Dexus says the investment is consistent with its investment in high quality Australian office properties.

The investment comes one day after the Commonwealth Bank announced that it had submitted non-binding proposals to internalise the management rights of the Commonwealth Office Property Fund, the CFS Retail Property Trust and the Kiwi Income Property Trust.

All three are managed by the banks’ wealth management arm, Colonial First State Global Asset Management.

This is believed to be as part of plans by the bank to exit the real estate funds management business.

The Australian Financial Review reports that Dexus and GPT are mulling a possible takeover bid for the office fund. They may also bid for the management rights.

Both have strong ties to the funds management business - Dexus chief executive Darren Steinberg was previously managing director of property for Colonial First State Global Asset Management while Carmel Hourigan, head of investment management at GPT, is a former fund manager of the Commonwealth Property Office Fund.

The AFR also names Mirvac, Investa Property, Brookfield and Blackstone as possible bidders for the office fund.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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