Mirvac Buys GE’s Australian Office Properties for A$584 Million

Mirvac Group, Australia’s third-biggest diversified property trust by assets, will buy seven Australian office buildings for A$584 million ($589 million) from GE Capital’s local real estate arm, and will fund the purchase primarily with an equity raising.

Mirvac will buy two buildings in the centers of Perth and Melbourne, and five Sydney properties to be redeveloped, the Sydney-based company said in a statement to the Australian stock exchange. It will seek to raise A$400 million selling shares at A$1.69 a piece to finance the acquisition, it said. Mirvac shares closed at A$1.745 yesterday, up 18 percent this year, and were halted from trading today.

The purchase follows Mirvac’s statement yesterday that it will boost its focus on acquiring and developing high-quality offices to deliver stable income and will establish investment partnerships to fund growth activities. The company in February reported a 69 percent slump in first-half profit after writing down residential development projects.

The assets are “in line with the strategic targets we announced yesterday,” Chief Executive Officer Susan Lloyd-Hurwitz said in the statement today. “We are very pleased Mirvac had the opportunity to select those assets from GE’s broader Australian portfolio that are best aligned with Mirvac’s ‘create and buy’ office strategy.”

Mirvac will undertake the fully underwritten share placement to institutional investors, followed by a sale to other eligible investors of as much as A$15,000 of units per person at the same price, it said today. The purchase will contribute to earnings from fiscal year 2014, it said.

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