Colonial First State Property and Gandel join forces
30 July 2002
Colonial First State Property Limited (a wholly owned subsidiary of the Commonwealth Bank Group) and Gandel Management Limited (GML) today announced a Proposal to merge the Colonial First State Property Trust Group (CFT) with the Commonwealth Property Office Fund (CPA) and the Gandel Retail Trust (GAN).
The Proposal will see the assets of CFT effectively acquired by CPA and GAN, creating two leading sector specific trusts each with an experienced management team and a strong financial alignment of interest between Unitholders and the Manager.
GAN will combine the retail assets of CFT with its current retail assets to consolidate its position as the second largest Australian retail trust in the listed property trust sector, with total assets of approximately $2.8 billion and an estimated market capitalisation of approximately $2.1 billion.
CPA will acquire CFT’s $1.18 billion portfolio of office, industrial and HTI office assets, providing a large, high quality diversified pool of assets at significantly lower transaction costs when compared to a direct property acquisition.
Following the acquisition CPA will become the largest office trust in the listed property trust sector, with total assets of approximately $2.1 billion and an estimated market capitalisation of approximately $1.6 billion.
Under the Proposal, Colonial First State Property will undertake the funds management activities for GAN. In addition, GAN will enter into new property management, leasing and development agreements with a new retail property management entity, Gandel Retail Management (GRM). Unitholders in GAN will receive an income stream related to the future earnings of GRM.
GML Chairman John Gandel said, "For some time, GAN has been seeking opportunities to grow and diversify its existing asset base and to capitalise on its retail management skills.
"Opportunities to acquire a large portfolio of this quality are rare, and this transaction achieves this objective but also gives investors an innovative arrangement where Unitholder and Manager interests are strongly aligned."
Colonial First State Property Executive General Manager Geoff McWilliam said, "The agreement is beneficial to Unitholders in all three listed trusts and provides the opportunity for management of each organisation to focus on its particular strengths. To find a like-minded partner that is committed to building a business model that aligns the interests of the investors and the management entities is an excellent outcome for all stakeholders."
GRM will manage the expanded retail portfolio of GAN, major retail property holdings within the Gandel Group and the retail assets of a number of Colonial First State Property’s wholesale funds. These appointments will result in GRM having assets under management of approximately $5 billion, making GRM one of the largest specialist retail property managers in Australia.