Australian real estate group Dexus has made a proposal to merge its fund with AMP Capital Diversified Property Fund.
The company said on Tuesday that its Dexus Wholesale Property Fund has entered into implementation agreement with AMP Capital Diversified Property Fund, a A$5 billion diversified property fund that invests in the office, retail and industrial sectors.
Under the agreement, the Dexus Wholesale Property Fund will seek to combine with AMP Capital fund via a stapling transaction.
”If the merger is approved and successfully implemented, the merged entity will provide existing Dexus Wholesale Property Fund and AMP Capital Diversified Property Fund unitholders with an enhanced investment proposition,” said Dexus in a statement.
AMP Capital Diversified Property Fund and Dexus Wholesale Property Fund unitholder meetings to vote on the merger are expected to take place in late April 2021.
“We are pleased to be able to make progress that will enable this merger to be voted on by both sets of unitholders. This merger delivers further economies of scale from a management, procurement and leasing perspective across the platform and is strongly aligned with our objective of being the wholesale partner of choice,” said Darren Steinberg, Dexus CEO.
“AMP Capital Diversified Property Fund is a strategic fit with Dexus Wholesale Property Fund’s existing portfolio providing additional exposure to premium assets. The ability to merge this portfolio in a cost and capital efficient manner enables us to create a combined entity which delivers strong benefits to investors,” added Michael Sheffield, Dexus Wholesale Property Fund Manager.
The company said the overall sector allocation and portfolio quality pf AMP Capital fund is comparable to the Dexus fund portfolio.
The portfolio includes investments in assets such as Quay Quarter Tower, Sydney (50% interest) which is currently under construction, 309-321 Kent Street, Sydney (50% interest, with remaining 50% co-owned by Dexus), Westfield Booragoon, Perth (50% interest) and Westfield Warringah Mall, Brookvale, Sydney (25% interest) along with a diversified portfolio of industrial assets.
AMP Capital Diversified Property Fund also comprises minority investments in two other AMP Capital managed wholesale property funds.