Dexus (ASX: DXS) is making a major move in the property trust management space via a proposed $320 million acquisition of APN Property Group (ASX: APD).
The deal will see Dexus become the manager of two ASX-listed real estate investment trusts (REIT) currently under the care of APD and grow its funds under management (FUM) by $2.9 billion.
Once complete, Dexus will have a funds management portfolio worth $23.9 billion that includes institutional wholesale capital, listed REITs, real estate securities and a direct unlisted property business.
The proposal already has the blessing of APN's board, with the cash price of 91.5 cents per APD security representing a 50 per cent premium over the closing price of the target's securities on 10 May 2021.
"We believe APN is a high quality real estate funds management business that complements our existing platform, and we look forward to APN's executives joining and strengthening the Dexus team while continuing to deliver strong results for investors," Dexus CEO Darren Steinberg said.
"This transaction supports our strategic initiative of expanding and diversifying our funds management business, increasing our suite of funds on offer outside of wholesale funds into listed REITs, real estate securities funds and unlisted direct property funds."
The board of APD has given the proposal a unanimous recommendation, including APN's chairman Chris Aylward with respect to his holding of 33 per cent of issued securities in the property manager.
"Dexus' all cash proposal represents compelling value to APN securityholders including a material premium to APN's trading price," Aylward said.
"We believe the combination of the two businesses will provide incremental growth opportunities for the APN business as well as its underlying funds, investors and our team members.
"We are very proud of the APN platform and the value it has created not only for APN securityholders but for the investors in our property funds. We look forward to seeing the continued growth of the APN funds and delivery of returns to our investors as part of the Dexus real estate funds management platform."
It is expected that APD securityholders will have the opportunity to vote on the proposal at a meeting expected to be held in mid-July 2021.
APN adds six services stations to convenience portfolio for $59m
In more news for APN, the company's convenience REIT (ASX: AQR) portfolio of service station properties has grown closer to 100 assets following a $59 million transaction announced today.
The deal sees AQR acquire a portfolio of six service station and convenience retail properties located in Queensland for nearly $60 million, representing an average purchase yield of 5.50 per cent.
The six properties were all newly built between 2014 and 2017, with over 80 per cent of the income leased securely to major tenants including 7-Eleven, Oporto, Anytime Fitness, Thrifty Car Rentals and BWS.
The remainder of the rents is derived from other national and local convenience retailers as well as two telecommunication towers leased to Telstra and Vodafone.
The most expensive of the six properties was a 7-Eleven-anchored asset in the Brisbane suburb of Griffin worth $16.6 million.
"This is another exciting portfolio acquisition which reflets our ongoing active approach to growing the portfolio in a prudent and disciplined way," AQR fund manager Chris Brockett said.
"These properties are outstanding examples of well located, designed and built service station and convenience retail centres with a great mix of national and local retailers.
"All sites are strategically located on main arterial roads and are exposed to high traffic flows."
Following settlement of this portfolio, expected in September this year, AQR's portfolio will comprise 97 properties valued at $619 million.Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.
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