Shopping centre landlord Vicinity Centres is understood to be the latest property group that is looking to compete for AMP’s real estate platform, as groups submitted first-round bids on Friday, according to sources.
It is understood AMP’s investment banks, Goldman Sachs and Credit Suisse, approached major landlords that they believed would be interested in buying the AMP real estate operations and asked the parties to come back with an expression of interest and put a price on what they believed the assets were worth.
Among those understood to have done so are Vicinity Centres, the $6.5bn Australian listed shopping centre landlord that owns half of Melbourne’s Chadstone shopping centre and is backed by retail billionaire John Gandel.
Other parties understood to have to have put forward a bid include Dexus (which had already lobbed a proposal for the AMP Capital Diversified Property Fund), Lendlease and Charter Hall.
Westfield shopping centre owner Scentre Group was approached by AMP’s investment banks, but it remains unclear whether it expressed an interest.
Should it be in pursuit, like Vicinity, it would probably only be for the shopping centres owned by AMP’s operations.
Oxford Properties Group, which purchased office landlord Investa, is not believed to be a suitor.
Apparently, real estate groups behind the scenes are looking to partner up to buy AMP’s operations, with some in talks about working together and also with AMP Capital suitors interested in the infrastructure side of the business.
Earlier, DataRoom reported there was also a major global party believed to be interested in buying AMP Capital, but the party was prepared to acquire the company outright.
It could then sell off parts to various suitors.
AMP’s real estate platform sits within its AMP Capital division, and the properties under management across the Asia-Pacific on behalf of global investors are believed to be worth about $27.7bn.
In total, AMP Capital has $192bn worth of infrastructure and real estate assets under management.
AMP manages a highly attractive portfolio of assets. Among them are Sydney’s Quay Quarter office and retail complex at Circular Quay, and shopping malls Macquarie Centre, in Sydney’s north, and Pacific Fair on the Gold Coast.
Vicinity owns 63 centres, including Sydney’s Chatswood Chase shopping centre as well as a 50 per cent interest in Chadstone, with its total portfolio under management worth $23.6bn.
Analysts believe the acquisition of some retail assets from AMP could be within Vicinity’s reach, with its debt levels at a modest 25.5 per cent, well diversified funding sources and a strong investment-grade credit rating of A/stable from Standard & Poor’s and A2/negative from Moody’s.
The company posted a $1.8bn loss for the 2020 financial year as it was plunged into disarray amid the COVID-19 crisis that saw a number of its shopping centres temporarily closed for business.
It also embarked on a $1.2bn equity raising by way of an institutional placement to bolster its balance sheet.
AMP is carrying out a sweeping review of its operations that could lead to a carve-up or full sale of the business after a period of instability and controversy for the company that includes the decision by AMP to appoint Boe Pahari as head of AMP Capital, despite a $500,000 fine for sexual harassment.
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