Market speculation has had it that Australand Property Group will be the next takeover target in the property space, but it's now thought that the current activity surrounding the $2.2 billion listed company centres on a potential spin-off of half of its $900 million residential development book.
It's a mooted deal that sources say could see a share of the business wind up in the hands of a pension fund or private equity firm.
Sources in the market say Australand has fielded direct approaches from parties looking to take half of the business.
While Australand would not comment on the speculation, the company has joined other real estate groups such as Federation Centres and shopping centre giant Westfield in spinning off stakes in its portfolios previously, and says it is "continually exploring new opportunities".
Should the group secure a capital partner, it would generate $450 million in new funding to drive higher earnings from other areas of the business.
While some questioned whether the deal would gain traction, given the previous sales process was unsuccessful, others said more joint-venture deals could be seen in the listed real estate sector.
Australand became a takeover target last year when the GPT Group made a $2.94 billion play for the company's office and industrial assets in late 2012.
While the offer was rejected at the time, its major shareholder, Singapore giant Capitaland, was searching for an exit and the company subsequently opened its data room to other bidders, with the hope that a sale of the entire business would eventuate.
Private equity firm Blackstone, Japanese home builder Sekisui House and West Australian developer Nigel Satterley's company Satterley Property Group were known to have shown some interest in the residential assets, trawling through the properties at a time when the development market was suffering.
Around that time, it is understood Stockland and Lend Lease were approached to take over Australand's residential business.
Capitaland has recently sold a 20 per cent interest in the company, leaving the Asian property developer with a 39 per cent stake.