Death and taxes are two of life’s certainties.
In Australia’s real estate circles you can add a third: the sale of Investa Property Group.
The fate of the Morgan Stanley-backed commercial property landlord, which manages a multi-billion-dollar portfolio that includes the listed vehicle Investa Office Fund, as well as the unlisted blue-chip office landlord ICPF, is a perennial target of speculation.
So when another spasm shoots through the market about a looming sale, scepticism is inevitable.
Nonetheless, senior property circles are once again abuzz with speculation about a looming sales process.
This latest outburst appears to have rippled down from Hong Kong with a number of sources claiming Morgan Stanley held talks with advisers, which may fire the starting gun on a long-awaited auction early next year.
The investment bank holds Investa Property within its MSREF VI fund, which was raised in 2007, and additionally controls close to 20 per cent in IOF.
Any sale is likely to necessitate the appointment of an investment bank to IOF, or its board of independent directors, as well as Investa Property Group, depending on how Morgan Stanley structures its exit.
The New York bank famously snapped up the sprawling property empire at the pinnacle of the credit boom in 2007, paying $4.7 billion for the assets in a highly-leveraged deal.
Since then Morgan Stanley has steadily shrunk the Investa asset base, paying down debt and securing a new $1.9bn senior banking facility.
While a resurgence in property values has bolstered the performance of this top-of-the-cycle purchase, many doubt whether the institutional investors MSREF VI would see a return on their money.
There are many permutations to any deal. Morgan Stanley may of course continue to gradually sell down the core portfolio, as it has done with a number of its other Australian assets.
This article first appeared in The Australian Business Review.