Ex-AMP independent trio reunited as Mirvac funds take shape

Wesfarmers director Sharon Warburton. Picture: Colin Murty

Mirvac has moved quickly to put the ultimate corporate governance band together, with three big names – former Future Fund property head Barry Brakey, Wesfarmers director Sharon Warburton and property veteran Paul Say – reappearing as independent directors of the unit that will run the $7.7bn office fund it picked up from AMP.

The search for a manager to run the vehicle was rocked last September when the trio suddenly walked from an advisory committee to the AMP trustee, without explanation. That was just one sign not all was well at the AMP Capital Wholesale Office Fund, which has interests in Sydney’s Quay Quarter Tower and 33 Alfred St, as well as major buildings in Melbourne.

The vehicle’s trustee board drafted in two other independent directors – corporate veterans Ming Long and Bob McKinnon – but the trio’s exit became a watershed moment for unhappy investors as the process effectively made it harder for outside contenders.

Despite a later recommendation that AMP be kept on as manager, the big superannuation funds invested in the vehicle clearly wanted change.

This came in April, in the form of Dexus buying Collimate Capital’s then $28bn local real estate and infrastructure funds management business for $250m from AMP.

But Mirvac eventually called a July meeting at which it was voted up to run the trust. It won about 60 per cent of the vote, with about 29 per cent against it taking over the fund, as some investors abstained.

The vote partly reflected anger about AMP’s decision to dump a spin-off of its Collimate business and to instead break it up between local and international buyers. Dexus has been protected by earn-out mechanisms even as more funds have left the Collimate empire, with UniSuper taking a $2.8bn mandate to GPT and that manager also picking up the AMP Capital Retail Trust.

There are still some ructions to come over the management of another $3.6bn shopping centre fund run by AMP’s funds arm, which is in the crosshairs of rival GPT. Shopping centre giant Scentre could play a decisive role as it has granted waivers to Dexus over three major assets, which are unlikely to be forthcoming for GPT.

But Macquarie analysts have asked how Scentre could fund any move on the assets at a time when demand for major malls has all but dried up.

Mirvac is also facing questions about how it will fund liquidity requirements for investors who want out of the former AMP office fund. It already has a half-stake in 60 Margaret St and MetCentre on the block and just sold Allendale Square, with more assets to go on the block.