Property investor GPT Group
(ASX:GPT) has this week emerged from the shadows to launch a surprise $2.99 billion takeover bid for Commonwealth Property Office Fund
(ASX:CPA), effectively leap-frogging a previously agreed $2.8 billion deal with Dexus Property Group
(ASX:DXS) and the Canadian Pension Plan Investment Board. GPT is offering $0.75325 in cash and 0.141 GPT securities for each CPA unit, valuing the REIT at $1.272 per unit. CPA responded quickly, saying it is considering the bid, while a representative from the Dexus consortium says the groups are currently undertaking due diligence and will make no further comment at this time.
CPA Management has recommended the Dexus bid of $1.21 per unit to shareholders and it is currently under due diligence. Now GPT has roared onto the scene with it’s own deal, which it says $4 billion in total- including CPA debt- and is conditional on receiving 50.1 per cent minimal acceptance. CPA shares closed at $1.205 on Monday, before the GPT bid came to light on Tuesday, sending them on a climb as shareholders licked their lips over the prospect of a high priced tug of war. Analysts have said they expect Dexus to come out and match the GPT offer, however the value of the competing bids will ultimately be determined by how the rival stocks trade, due to the cash and share components of both offers. GPT has also said it will look to sell assets into its wholesale funds as part of the deal funding.
RBA's November minutes
Also this week, the RBA noted in the minutes of its November board meeting that despite strong prices, the housing market is not causing any particular worry about a housing bubble:
Members noted that conditions in the housing market had continued to strengthen. Nationally, dwelling prices were above their late 2010 peak, with prices over the three months to October increasing significantly in Sydney. Housing turnover and loan approvals had picked up noticeably. Improved conditions in the established housing market were providing an impetus to dwelling investment, with residential building approvals increasing over the year. Approvals increased notably in September, driven by a pick-up in high-density approvals, which tend to be quite volatile from one month to the next. In discussion, members observed that developments in the established housing market and the increase in new dwelling activity seen to date were among the expected effects of the low level of interest rates.
Australian auction results
Looking at this week’s auction results across Australian capital cities - Sydney recorded a 81 per cent clearance rate from 502 properties for auction, Melbourne cleared 73 per cent from 759 properties, Brisbane had a 64 per cent clearance rate from 14 properties listed and Adelaide cleared 72 per cent from 24 reported auctions.
Commercial property sector
Lend Lease Group
(ASX:LLC) says it is well positioned for the year ahead with a substantial pipeline of projects. Addressing shareholders at the group's annual general meeting, chief executive officer Steve McCann said the group had a strong backlog of work, a strong balance sheet and access to third party capital to assist funding the delivery of the pipeline. Chairman David Crawford said the group was encouraged by the election of the coalition government on a platform of infrastructure growth.
Leighton Holdings Limited
(ASX:LEI) has sold a North Sydney development to Suntec Real Estate Investment Trust for just over $413 million. The contractor announced the sale of 177 Pacific Highway, North Sydney and says it represents an initial yield of 6.89 per cent. Leighton chief executive officer Hamish Tyrwhitt said the project was keenly sought by buyers domestically and internationally.
