Let’s get together: Mirvac-GPT the latest real estate speculation

Mirvac's residential apartment development Ascot Green next to Eagle Farm racecourse.

Plenty of tie-ups between real estate groups have been touted before in the listed property space, but what about Mirvac and the GPT Group?

Apparently, a pairing between the parties has been loosely under consideration.

However, it is thought that GPT’s chairman, Rob Ferguson, would not be eager for a merger because it would expose the country’s oldest property trust to residential development risk.

The companies’ bosses know each other well.

The rationale for any potential deal is that GPT’s current chief, Bob Johnston, used to run the residential developer Australand before it was privatised, and the understanding is that Mirvac’s managing director, Susan Lloyd-Hurwitz, would not be averse to the idea of returning to Britain.

Residential development earnings represent about 30 per cent of Mirvac’s earnings, with momentum expected to moderate in 2018-19 before rebounding in 2020 on the back of the company’s Sydney Olympic Park pipeline.

Meanwhile, as a guessing game unfolds about the next major merger or acquisition in the property sector, analysts continue to await the next move of Cromwell with respect to its stake of just under 10 per cent in the $3 billion-plus office landlord Investa Office Fund.

Some are betting that the unlisted Investa Commercial Property Fund will buy the stake, along with the interest that is still controlled by Morgan Stanley — a stake of just under 10 per cent worth about $300m, with the US-based investment bank unable to trade the shares until December 15. One theory is that IOF will then buy half of the management rights in a deal worth about $45m.

Cromwell is not thought to be interested in IOF as a takeover target, while Dexus, which previously bid for the business, is thought to have since lost interest.

Another possibility is that both the Morgan Stanley and Cromwell stakes are sold down on to the market in two separate block trades.