Brookfield Property Jumps Most in Two Years on Sale Plans

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Brookfield Property Partners LP climbed the most in two years after the landlord said it’s in the process of selling at least $1.3 billion in apartment, industrial and office assets, taking advantage of demand for real estate.

The company is in advanced talks to sell a stake in its 99 Bishopsgate office tower in London as well as a Toronto property -- a total of about $300 million of assets on the market, executives said on a conference call Tuesday. In addition, Brookfield plans to raise about $1 billion this year from the sale of interests in some properties and is seeking to sell some multifamily and industrial properties later this year and in early 2016. Asset sales are the best method for raising money for acquisitions, Brookfield said in a letter to shareholders.

“There’s no shortage of interest from institutional and sovereign-wealth funds so we think it’s a good time to recycle capital out of mature stabilized assets,” Chief Executive Officer Ric Clark said on the second-quarter earnings call. “We’re capitalizing on that.”

Brookfield rose 4.8 percent to $21.22 at close of trading in New York, the biggest one-day gain since April 2013.

The firm is selling buildings as investors’ appetite for real estate grows. In the first half of year, commercial-property transactions climbed to a level not seen since 2006, according to research firm Real Capital Analytics Inc.

Offices, Retail

Brookfield has the majority of its invested capital in office buildings, at $19.1 billion. Retail real estate accounts for $9.23 billion, and other opportunistic assets, including multifamily and industrial properties, total $1.74 billion, according to company financial supplements.

The sale of industrial assets and apartment buildings would be part of Brookfield’s opportunistic strategy, in which the company teams with institutional investors to buy underperforming assets, improve them and sell them for a profit. Such investments represent 10 percent of the New York-based company’s balance sheet.

“We’re at the stage where we’re starting to focus on harvesting our investments,” Clark said. “Expect in the near term we’ll start to do that and pick up the pace over the next couple of years.”

Brookfield executives also said on the call that the company would begin buying back stock as soon as the quarter’s blackout period is lifted.

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