Investa Wholesale Funds Management Limited today announced it has entered into a binding agreement to purchase Investa Office Management Holdings (IOMH), owner of Investa Office Management (IOM or “the Platform”), from Morgan Stanley Real Estate Investing.
The acquisition will be made by a new company to be stapled to Investa Commercial Property Fund (ICPF), collectively the Investa Property Group (IPG).
The transaction received unanimous support from unitholders, with all unitholders that voted casting votes in favour of the proposal. The vote had a high turn out with 80% of the units being voted. The transaction is expected to settle in March 2016.
Strong investment performance
- The acquisition includes IOM’s funds and property management rights of circa $8.5 billion of assets across a portfolio of 39 prime grade office buildings in Australia’s major office markets, and nearly 200 employees across Sydney, Melbourne and Brisbane.
- It resolves the ownership of IOM while ensuring continuity of management, delivering certainty and stability to the Platform’s key clients, including Investa Office Fund (IOF) (ASX:IOF) and ICPF, as well as IOM staff.
- IOM will maintain existing management and governance structures and policies of the Platform.
- IOM will retain its best-in-class management platform and continue to deliver superior investment services to its clients.
Under IOM, both IOF and ICPF have performed strongly, highlighting the benefits of the Platform’s sector specialisation and integrated business structure.
Since 2011, when IOM assumed management responsibilities, IOF has outperformed the broader market and many of its peers, while in 2015 ICPF was ranked the best performing unlisted core fund in Australia by the Mercer/IPD Index.
Under IOM both funds have improved the quality of their respective portfolios through divestments and acquisitions, including several successful joint acquisitions, and proactively added value and addressed risk to deliver strong returns for investors.
The solid performance of the Investa team was again demonstrated in the IOF FY16 interim results announced last week, which included an increase in statutory profit of 182% on the prior period, a 10% increase in NTA and an increase in FFO from 28.1 to 28.4, a 2.5% improvement on FY15.
IOM is committed to continuing to deliver the high standard of service to IOF under its market-leading fee arrangements to maximise value for IOF unitholders, including leasing and transaction activities.
Rigorous governance and management structure to continue
IOM will maintain the existing management structure of the Platform, with separate management teams and majority independent Boards for each Responsible Entity of IOF and ICPF.
IOM’s rigorous governance policies which have underpinned its strong track record of conflict management, will also remain in place. The IOF and ICPF boards will retain their separate board charters which govern each fund’s strategy and direction.
A new, majority independent IOM board with an independent Chairman will be established to oversee operations and optimise performance of the Platform in the interests of all stakeholders.
The Implementation Deed with IOF will not be affected as a result of this transaction.
IOM positioned for continued success
Jonathan Callaghan, CEO and Managing Director of Investa Office Management said:
“This transaction is an excellent result for IOM. It will deliver new, committed owners, with the resolve and expertise to maximise value for investors over the long term.
“Significantly, this transaction will result in a change in ownership, not a change in management, and as such it will be business as usual as we continue to deliver a high-quality service to our clients.
“The high level of interest in the sale process from a number of property groups is testament to IOM’s position as the leading end-to-end management platform in the sector.
"Mr Callaghan said maintaining the Platform’s scale and leveraging the strong track record of its experienced, multi-disciplined team were important in continuing to deliver a strong investment performance to IOF and ICPF.Investa Group Executive, Michael Cook, said IOM staff welcomed the transaction and remained focused on continuing to deliver the exceptional returns unitholders have benefited from over many years.
“Our highly committed and experienced team, who are recognised across the industry for their expertise, are very supportive of the ownership change. This is good news for our clients as it means the unique Investa culture of high performance and track record of identifying and nurturing new talent will continue well into the future,
” Mr Cook said.Mr Callaghan said that IOF unitholders will be provided with further information regarding ongoing management under IOM, to ensure they are fully informed about the choice to continue to be managed by the Platform.
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