Commonwealth Bank of Australia (CBA) is seeking to exit its property management business by proposing that its three listed property funds set up their own management teams.
CFS Retail Property Trust (CFX) and Commonwealth Property Office Fund (CPA), now managed by CBA’s funds management division, and Kiwi Income Property Trust in New Zealand have received a conditional proposal from the bank to internalize their management, the trusts said in separate regulatory filings. The bank is also proposing that CFS Retail acquire the wholesale property funds management and retail property and development business from CBA, the trust said.
An exit by CBA would see the last major Australian bank with a property arm distance itself from its real estate business, after Macquarie Group Ltd. in 2010 sold the management rights of its property trusts to Charter Hall Group. (CHC)
Commonwealth Management Investments Ltd., the manager of the two Australian trusts, has established a sub-commitee of independent directors to consider the proposal, it said. It has appointed UBS AG as financial adviser and Ashurst as legal council, it said. The board of Kiwi Income Properties Ltd. will consider the proposal for Kiwi Income Property Fund, the trust said.
CFS Retail, Australia’s third-biggest retail property trust by market capitalization at A$5.5 billion ($5.1 billion), was 2.1 percent higher at A$1.965 as of 10:25 a.m. in Sydney. Commonwealth Property Office Fund, valued at A$2.6 billion, was also 2.1 percent higher at A$1.11.
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