The A$10bn (€6.5bn) Dexus Wholesale Property Fund (DWPF) is proposing a merger with the AMP Capital Diversified Property Fund (ADPF) to create an entity with assets of A$14bn.
The proposed merger has sparked an alternative proposal to ADPF from AMP Capital, which hopes to retain the fund on its platform.
Darren Steinberg, CEO of Dexus, said: “This merger delivers further economies of scale from a management, procurement and leasing perspective across the platform, and is strongly aligned with our objective of being the wholesale partner of choice.”
ADPF and DWPF unitholder meetings to vote on the merger are expected to take place late in April 2021.
ADPF investors first approached Dexus with a merger suggestion last year, in the wake of a series of corporate issues facing the AMP group. These culminated in an agreement last month with US-based Ares Management to buy a 60% stake in AMP’s private markets (including real estate) platform.
Ongoing uncertainty over AMP’s future has prompted a wave of redemption requests, reportedly totalling up to A$2.5bn.
Deborah Coakley, Dexus’ executive general manager, funds management, told IPE Real Assets: “Our proposal provides a clear path to meet the redemptions, which involves agreed asset sales as well as management of the (redemption) queue in an orderly fashion.
“Obviously the redemption is at ADPF, and our merger proposal allows those investors to join the merged fund. DWPF is an outperforming fund, so those who choose to do so have an opportunity to rethink their redemption requests.”
Michael Sheffield, DWPF fund manager, said ADPF investors were supportive of the merger proposal, and that it gave them an opportunity to “reset” their redemptions. From discussions with investors over the past several months, he said, some investors could withdraw their redemption requests.
The ADPF’s portfolio includes investments in assets such as Quay Quarter Tower, in Sydney, two prime regional shopping centres in Sydney and Perth, and a diversified portfolio of industrial assets.
Kylie O’Connor, AMP Capital’s head of real estate, said the AMP’s counter-proposal would deliver value to ADPF unitholders.
“The performance of ADPF speaks for itself, and we are confident that our proposal will deliver benefits to all ADPF unitholders,” she said.
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