Johannesburg - JSE-listed Redefine Properties has partnered with its Australian Stock Exchange-listed associate company, Cromwell Property, to bid for A$9 billion (R83.58bn) of Australian real estate being sold by Morgan Stanley’s Investa Property.
Andrew Konig, the chief executive of Redefine Properties, confirmed yesterday it was involved with Cromwell Property “in the process”. However, Konig said their bid was an indicative offer because the bidders would be narrowed down to a final list of bidders by Friday.
Redefine Properties is believed to be one of several bidders for the assets held by Investa, Australia’s third-biggest owner of city centre offices.
Bloomberg reported on Tuesday that bids for the property assets have also been submitted by Blackstone, Brookfield Asset Management and Dexus Property.
The business wire service said sources had revealed that Blackstone and Brookfield had made separate offers before yesterday’s deadline while Dexus teamed with Abu Dhabi Investment Authority and LaSalle Investment Management bid with sovereign fund China Investment.
Redefine Properties previously stated that its intention was to deepen its international presence, but not necessarily by increasing its shareholding in listed Australian property group Cromwell or in Redefine International, but by investing in the Australian office market with Cromwell and in German shopping centres with Redefine International as partners.
Challenges
Marc Wainer, the executive chairman of Redefine Properties, previously indicated that challenges existed in obtaining Reserve Bank approval for direct investments in foreign property. But he emphasised that the returns from such investments were attractive, which was the reason it did not yet have an appetite for property investments in Africa.
Redefine International in January reported that it had completed the acquisition of a portfolio of 56 retail properties in Germany in an equal joint venture with Redefine Properties in a transaction valued at e157 million (R2.14bn).
Redefine Properties is internationally diversified through its direct interest in Cromwell Property Group and JSE-listed associate Redefine Properties International, which has a 66 percent stake in London Stock Exchange-listed subsidiary Redefine International.
Bloomberg said some suitors may also bid for A$2.5bn of Australian office assets held on Morgan Stanley’s balance sheet as well as management rights for the portfolio, people familiar with the matter said in April.
Complicated
It said several more weeks of talks were expected before Morgan Stanley chose a winner given the complicated structure of the Investa portfolio, its sources said.
Representatives for Blackstone, Brookfield, Dexus, LaSalle and Morgan Stanley declined to comment while a Sydney-based spokesman for Cromwell didn’t immediately respond seeking comment.
Morgan Stanley Real Estate Investing said in February it had appointed Morgan Stanley and UBS Group to advise on the sale.
Dexus and Canada Pension Plan Investment Board last year acquired the property fund managed by Commonwealth Bank of Australia, gaining ownership of A$3.2 billion of office buildings, it said.
Redefine shares on the JSE on Tuesday increased by 0.99 percent to R10.25.
Business Report