The turmoil in the financial markets will likely slow the recent flurry of merger and acquisitions of European property companies by Australian investors, according to Alistair Meadows, head of capital markets in Australia for broker DTZ. Up into a few years ago, the focus of the Australian activity in Europe was on direct property, mainly offices, retail and some logistics, resulting in portfolios being listed on the Australian Stock Exchange and traded as an investment trust.
The turmoil in the financial markets will likely slow the recent flurry of merger and acquisitions of European property companies by Australian investors, according to Alistair Meadows, head of capital markets in Australia for broker DTZ. Up into a few years ago, the focus of the Australian activity in Europe was on direct property, mainly offices, retail and some logistics, resulting in portfolios being listed on the Australian Stock Exchange and traded as an investment trust.
More recently Australian companies shifted their focus to acquiring European property companies to help build a platform on the Continent. Back in June 2007 Australian-listed developer Valad Property Group acquired Scarborough in the UK in a transaction worth £865 mln (EUR 1.28 bn). Goodman has acquired several companies, including Rosemound Developments and Arlington.
Goodman bought Rosemound Developments for £336 mln (EUR 493 mln) in April to start a new fund investing in UK warehouse distribution centres while Arlington Business Park Partnership acquired Akeler, the owner of a portfolio of UK business parks, for EUR 887 mln in November last year. Meadows said the level of merger and acquisition activity would slow in the present uncertain climate.
In recent years, Australian investors have been particularly active in Europe and elsewhere in the world because of two factors, Meadows added. Firstly, Australia is a small and very mature market, with more than 70% of investment-grade assets owned by securitised vehicles. Secondly, the 9% superannuation levy on salaries fuels huge inflows into property.
Click on the link below to watch PropertyTV's interview with Alistair Meadows.
