China’s sovereign wealth fund, China Investment Corp, has agreed to have its freshly purchased Investa assets managed by Mirvac Group, in a move that will further shake up Australia’s commercial office sector.
According to sources a deal is close to being finalised and Mirvac will make an announcement confirming the move shortly, the BusinessNow blog reported earlier.
CIC acquired the portfolio of skyscrapers from the Morgan Stanley-backed Investa Group earlier this year in a blockbuster $2.45 billion transaction.
News of this latest defection from the Investa empire comes in the wake of Dexus’s $2.5bn takeover approach for Investa Office Fund, in a merger that cements the office landlord’s status as the largest player in the sector.
If IOF unitholders accept Dexus’ bid, Investa’s wholesale fund, ICPF, will become the last remnant of an $8.9bn property empire that was swept up by Morgan Stanley at the height of the last credit bubble in 2007.
The US bank decided to sell its boomtime purchase in February but had not planned on dismantling the group.
However the conflicting strategies of the two funds appear to have prevented an agreement to internalise Investa — a move that would have kept the existing management structure intact — with each entity now headed for very different outcomes.
CIC is the least valuable of the three main funds, with ICPF generating the highest income, but China’s decision to back Mirvac offers a fillip for the diversified property trust after its recent failure to secure the entire Investa management platform in a $400m-plus deal.
This article first appeared on The Australian Business Review