- Dexus are looking to take over the $5 billion AMP Capital Diversified Property Fund
- They will merge this with their own Wholesale Property Fund
- The agreement will now go for a vote from unitholders
After six months of discussions, Dexus Property Group announced they have reached agreement with AMP Capital to take over its circa $5 billion AMP Capital Diversified Property Fund (ADPF).
The agreement – which now goes to unitholders for a vote – will see Dexus merge the fund into its own Dexus Wholesale Property Fund (DWPF).
The ADPF has invested in high-end office, retail and industrial properties, and in some respects is fairly similar to Dexus’ own wholesale property fund.
Assets include Quay Quarter Tower in Sydney (50% ownership, under construction), 309-321 Kent Street, Sydney (also 50%, with the other half co-owned by Dexus), Westfield Booragoon, Perth (50%) and Westfield Warringah Mall, Brookvale, Sydney (25%).
If the merger is approved by ADPF and DWPF unitholders, it will expand and diversify Dexus’s funds management business. In addition, it will diversify DWPF’s existing wholesale institutional investor base through the introduction of new investors, while expanding existing relationships already established within Dexus’s funds management platform.
AMP Capital had put forward alternatives to this arrangement.
“ADPF is a strategic fit with DWPF’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.”
Michael Sheffield, DWPF Fund Manager
Deborah Coakley, Executive General Manager, Funds Management said that the team had a track record of “delivering outperformance and supporting the investment strategies of our capital partners.”
“We look forward to adding further value to the merged portfolio and welcoming new investors to our platform,” she said.
The CEO of Dexus confirmed there would be economies of scale in the merged fund.
“We are pleased to be able to make progress that will enable this merger to be voted on by both sets of Unitholders,” said Darren Steinberg, Dexus CEO.
“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.”
