Centuria, 360 Capital in $3.5bn merger talks

360 Capital

Speculation is mounting that Centuria Funds Management and Tony Pitt’s 360 Capital are holding takeover talks to create a $3.5 billion real estate empire.

It is understood that Moelis is likely to be at the centre of these discussions, with the advisory firm said to have worked with both parties in the past.

Sources believe Centuria is the suitor of 360 Capital, although it remains unclear whether a potential transaction would involve the head stock of both companies or their listed funds.

360 Capital did not comment on the speculation yesterday, while Centuria did not return a call.

Centuria, which has a market value of about $81m, has at least $1.9bn of funds under management through its listed Centuria Capital, while 360 Capital, with a market value of about $218m, has $1.48bn under management.

Both groups own offices, industrial properties and shopping centres through their funds, and market analysts yesterday described the speculation as timely.

They argue that consolidation is needed among real estate groups, with the sector currently comprising about 30 small-capitalisation stocks.

Many maintain that strong synergies would be achieved from combining the operations of groups such as Centuria, which was founded by group chief executive John McCain, and 360 Capital.

Also boosting the argument in favour of a deal is the fact that the stocks in the sector have sold off in recent months, a situation that prompted Charter Hall to suspend its plans to list its Charter Hall Long WALE REIT, which was expected to be strongly supported weeks ago when property stocks were rallying.

Centuria’s listed funds are run by the well-regarded Nick Collishaw, who was formerly the managing director at the listed Mirvac Group. The company is understood to be cashed-up after failed attempts to take over the GPT Metro Trust earlier this year.

Mr Collishaw is an experienced player and is well positioned to execute such a deal, sources say, supported by the windfall Centuria received from a sale of the stake in the GPT fund at a higher price.

In an interesting twist, Mr Collishaw was previously Mr Pitt’s boss when he, too, worked at Mirvac before becoming the founding director of 360 Capital.

Centuria made its $300m tilt at the GPT spin-off through its Centuria Metropolitan REIT earlier this year, but South Africa-based Growthpoint Properties Australia trumped Centuria’s offer and swallowed the GPT portfolio.

Moelis, known to be close to Mr Pitt, advised Centuria on that takeover attempt and may have initiated the talks between the parties.