Mid-week ASX property wrap: 20 October

• Market is trading 3.2% higher than the start of October
• ABP made 22 self-storage acquisitions
• HDN and AVN to merge

This week started with the announcement of a merger, the potential acquisition of IAP, and several acquisitions across self-storage, logistics, and offices.

The broader market

The ASX200 closed today at 7,413.70 points, gaining 38.80 points or 0.53%, setting a new 20-day high.

That makes it a 3.2% increase from the start of the month.

Top-performing ASX listed real estate company shares: 20 October 2021

Source: ASX

In addition to the top performers, the bottom five (from fifth lowest to lowest) were:

Least-performing ASX listed real estate company shares: 20 October 2021

Source: ASX

The movement

Monday saw the announcement that HomeCo Daily Needs REIT (ASX: HDN) and Aventus (ASX: AVN) are set to merge. The companies have entered into a binding scheme implementation deed, with the merged group expected to have a combined portfolio worth $4.1 billion, and a market cap of circa $3.2 billion.

HDN will contribute 93% of the total consideration paid to AVN securityholders, while HomeCo (ASX: HMC) will make up the remaining 7%.

Under merger, AVN securityholders will receive consideration with an implied value of $3.82, comprising 2.2 HDN units per Aventus Retail Property Fund unit, and $0.285 cash or 0.038 HMC securities per Aventus Holdings limited share.

HMC said the merger “significantly accelerates HMC’s growth and scale with external AUM increasing to approximately $5 billion (+127% versus FY21), which is 12 months ahead of HMC’s stated $5 billion 2022 target.”

HomeCo (ASX HMC) also announced a proposal for the simplification of the HomeCo structure from a stapled company structure to a single company structure.

Irongate (ASX: IAP) also announced it received an unsolicited, highly conditional and indicative non-binding proposal from 360 Capital Group (ASX: TGP) and 360 Capital REIT (ASX: TOT) after close of trading on Friday, 15 October.

The proposal was for 360 Capital to acquire all stapled securities in IAP that 360 Capital did not already own for $1.6047 per stapled security.

Finally for Monday, GPT Group (ASX: GPT) announced the acquisition of $681.7 million in property. GPT acquired a portfolio from Ascot Capital, comprising 23 logistics assets and one office asset.

The acquired portfolio is 75% weighted to eastern seaboard states and the ACT. The 23 logistics assets acquired, totalling 161,700 square metres of gross lettable area, are located across Australia, and are fully leased with a weighted average lease expiry (WALE) at 30 September 2021 of 9.8 years.

The 6-level 10,200sqm Office asset acquired is well located in the Canberra CBD, with a WALE of 4.7 years at 30 September 2021.

Approximately 70% of the acquired portfolio by income is leased to Government, ASX listed or multinational entities which is in line with GPT’s existing portfolio.

On Tuesday, Dexus Industria REIT (ASX: ADI) announced it successfully completed the retail entitlement offer that was originally announced on 23 September this year.

The offer closed Friday last week, raising $105 million at an offer price of $3.45 per ADI security. Together with the industrial component of the Entitlement Offer, the total amount raised was approximately $250 million.

Today, Abacus Property Group (ASX: ABP) announced more acquisitions within the self-storage space. The company transacted on 22 assets for $370 million in the quarter to 30 September 2021.

Of these acquisitions, $271 million have already settled with the remaining $99 million due to settle by the end of FY22.

The 22 acquisitions comprised 11 existing Storage King managed stores, five independently managed, and the remaining six are development sites.

That’s the latest in ASX-listed real estate companies, with 2021 perhaps shaping up to be the year of mergers and acquisitions.