Dexus Buy Stokes Commonwealth Office Share Surge: Sydney Mover

Commonwealth Property Office Fund (CPA) surged the most in more than four years after Dexus Property Group (DXS), Australia’s biggest listed office landlord by market value, said it bought a stake in the trust.

Dexus agreed to acquire a 14.9 percent interest in the fund, buying the units on a forward contract basis at A$1.1334 a share, the Sydney-based company said in a statement to the Australian stock exchange. Shares in Commonwealth Property Office Fund rose as much as 6.2 percent.

Commonwealth Bank of Australia (CBA) yesterday proposed that its three real estate funds -- Commonwealth Property Office Fund, CFS Retail Property Trust (CFX) and Kiwi Income Property Trust -- set up their own management teams. Commonwealth Office, the smaller of the two Australian trusts with assets of A$3.8 billion, may be a takeover target of office operators including Dexus, GPT Group (GPT) and Investa Office Fund (IOF), groups including CLSA Asia Pacific Markets and Morgan Stanley forecast.

“We know the assets very well and we think Commonwealth Property Office Fund may be important to Dexus in the long term,” Dexus Chief Executive Officer Darren Steinberg said in a telephone interview today. “However at this point in time, there’s no proposal to go any further.”

Steinberg was head of property at Colonial First State Global Asset Management, the funds management arm of CBA, before taking over as CEO of Dexus in March 2012.

Commonwealth Property Office Fund shares climbed 4 cents to A$1.17 as of 11:00 a.m. in Sydney. They earlier rose 7 cents to A$1.20, the biggest daily increase since June 2009. Dexus shares rose 1.2 percent to A$1.0425.

Dexus’s purchase price is a 1.5 percent discount to Commonwealth Office’s net tangible asset value of A$1.15 as of Dec. 31, according to today’s statement.

To contact the reporter on this story: Nichola Saminather in Sydney at

To contact the editor responsible for this story: Andreea Papuc at

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