Battle for AMP mall fund ‘down to a choice between Dexus and GPT’
Investors must choose between joining the Dexus fund empire or jumping into a merger with a GPT fund.
The race for a $3.6bn shopping centre fund run by wealth manager AMP is sharpening as major superannuation fund investors weigh up a merger with a fund run by rival group GPT.
That would create a $7bn vehicle with the capacity to deal with the challenges at the top end of the industry, although the GPT is also under the liquidity pressure that has hit the sector.
Big centres have been among the hardest hit in the wake of the Covid-19 pandemic and values are falling even as customers return. The industry is expected to consolidate as billions of dollars’ spending is required to overhaul the properties into mixed-use centres.
The AMP fund is part of the Collimate operation which was bought by Dexus in April.
Since then, rivals have sought to pick off key vehicles – a $7.7bn office fund going to Mirvac.
A switch in the management of the AMP Capital Shopping Centre Fund appeared to pick up momentum earlier this month. GPT won control of another unlisted shopping centre vehicle, which owns Pacific Fair on the Gold Coast and a stake in the Macquarie Centre in Sydney.
But despite the support of a group of investors in the AMP vehicle for a merger with GPT’s unlisted Wholesale Shopping Centre Fund, a move could be hampered by hefty redemptions in the unlisted vehicle and Scentre Group’s reluctance to grant crucial waivers on malls it co-owns.
Big assets in the AMP fund include half interests in Westfield Southland in Melbourne, Westfield Tea Tree Plaza in Adelaide and Westfield Liverpool in Sydney’s western suburbs.
Scentre has granted waivers to allow Dexus to keep stakes in the centres when it takes on the running of the AMP fund but would not grant them to GPT, industry players said.
Scentre would be unlikely to take the interests on its balance sheet but could nominate a partner to take them.
Large mall deals have been thin on the ground, making it tough for this to be done quickly.
The contest for the AMP fund originally involved the rival Vicinity Centres, which had pitched itself as a potential manager of the AMP retail funds. The decision is now between staying with AMP, and then shifting to Dexus, or the GPT merger plan.
GPT has not commented. But it has told investors it has had a positive reception and played down the pressure from redemptions. The manager also believes a merger to create a larger vehicle would be powerful even if it lost the Westfield properties, which are about 40 per cent of the AMP fund.
Dexus also declined to comment, but it believes that securing the crucial waivers to pre-emptive rights held by Scentre will give it an advantage.
The behind-the-scenes battle is unlikely to come to a head quickly. An independent committee of the AMP fund’s trustee board is preparing a recommendation on the path forward for investors.
An AMP spokesman said the company was “continuing to progress” the sale of its domestic infrastructure and real estate business to Dexus.
“We have strong conviction that Dexus will add significant value for the funds’ investors through its strong track record and deep experience in real estate asset management,” he said.
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