Two of the biggest conundrums in property could be resolved by the weekend — the future of the $8.9 billion Investa Office platform and the leadership of the venerable GPT Group.
This column first revealed that China Investment Corporation, the world’s fourth-largest sovereign wealth fund, and LaSalle Investment Management were close to winning preferred bidder status in the UBS and Morgan Stanley-advised process for Investa’s towers and management platform.
The Chinese group’s move has profound implications for the local office sector, as it would mark a near $2.5bn investment in local skyscrapers and light a path for Chinese insurers keen to invest in Australia.
The revelation that CIC’s partner LaSalle Investment Management was likely to be preferred on the management business prompted a fevered reaction from local groups. Mirvac, Dexus and Cromwell still covet the chance to run the unlisted Investa Commercial Property Fund and the listed Investa Office Fund, not to mention the possibility of an IOF internalisation. These abiding interests had helped sharpen LaSalle’s pricing, sources said.
GPT’s search for a chief executive was last week throwing up names ranging from former Investa head Chris O’Donnell, and current boss Campbell Hannan, US-based Lend Lease heavyweight Denis Hickey and another offshore Aussie, Hong Kong-based Ian Robins, now of Capstone Real Estate Advisors, but previously head of Hong Kong’s massive Link REIT.
Some fund managers are believed to have lent towards an external candidate, as they have been unimpressed with GPT’s lacklustre record of failed takeovers and strategy drift. However, senior sources insisted late on Friday that chief investment officer, Carmel Hourigan, was a near certainty to take the prize, with the board expected to wear any market backlash.
This article first appeared in The Australian Business Review.