GPT takes aim at AMP shopping centre fund

The management of a $3.6bn shopping centre fund run by AMP’s funds arm is in the crosshairs of rival GPT after it last week took another major trust from the wealth group.

Shoppers at Pacific Fair shopping centre on the Gold Coast. Picture: Steve Pohlner

The management of a $3.6bn shopping centre fund run by AMP’s funds arm is in the crosshairs of rival GPT after it last week took another major trust from the wealth group.

AMP sold its local real estate and infrastructure business, Collimate Capital, to Dexus in April and industry rivals have since sought to pick off key vehicles in the once $28bn funds business.

AMP last Friday said it would lose management of the heavyweight AMP Capital Retail Trust, after receiving a notice from the majority of unitholders of their intention to shift the management over to GPT. The trust owns Pacific Fair on the Gold Coast and a 50 per cent stake in Sydney’s Macquarie Centre, and the latter asset is co-owned by the AMP Capital Shopping Centre Fund.

That $1.7bn Sydney complex is also one of the largest in the $3.5bn GPT Wholesale Shopping Centre Fund and last week’s switch will renew a push to bring it “under one roof” at GPT, industry executives told the Australian.

Both GPT and rival Vicinity have made plays for the remaining large AMP property fund. GPT has proposed merging it with its own shopping centre fund to help combat the pressures faced by the industry.

The two vehicles are considered sub-scale as big malls change to survive. Both have properties that can be redeveloped as mixed use assets with plans already in place for additional towers next to the Macquarie Centre.

On their own, each of the funds would struggle to finance such plans and also provide an exit for investors who want out.

The Collimate business has been breaking up. Last Thursday, GPT said it had also started managing a $2.8bn direct real estate mandate for UniSuper that was held by Collimate. On Friday it announced it would take on management of the AMP Capital Retail Trust, which holds Pacific Fair and the Macquarie Centre stake.

Industry players said that bringing the ownership of the Sydney landmark under one roof would be pitched as an advantage to investors as it is a major asset in both the AMP and GPT funds.

But there are complications including the stakes in three Westfield centres that are held in the AMP fund. If it leaves the Collimate empire it could trigger pre-emptive rights held by Westfield.

Dexus is protected if the management of funds is lost through a price adjustment mechanism on its deal to buy Collimate. It was hit last month by the departure of a $7.7bn office fund to Mirvac.

Any change would be fiercely resisted by Dexus, which has its own substantial retail capacity. It is likely to pitch to investors its own skills, combined with the AMP platform, which has outperformed the GPT retail team on a returns basis, as being the best option. The influence of the Westfield centres could also be decisive with operator, ASX-listed Scentre Group, understood to have granted waivers to allow Dexus to run the centres in the AMP fund.

It is not willing to grant this to GPT as it is a rival making a fresh play to expand, sources said.

If Scentre does not grant the waivers and GPT wins control of the fund it could buy out the interests in the three complexes or put them into the hands of a partner of its own choosing.

The Australian has been told that the sentiment that prompted a switch in the office fund – including widespread anger about AMP’s corporate governance failures stoking a committed group of super funds to move camps – are not present in the retail fund.

Big assets in the AMP fund include a half interests in Westfield Southland in Melbourne, Westfield Tea Tree Plaza in Adelaide and Westfield Liverpool in Sydney’s western suburbs.

The AMP fund also owns a 25 per cent stake in Brisbane’s Indooroopilly Shopping Centre, with the other 75 per cent already in play. A Dexus fund is trying to sell its 25 per cent interest, and the half interest owned by the Commonwealth Superannuation Corporation is also for sale.

The AMP fund also has stakes in Stockland Townsville in Queensland and the Bayfair Shopping Centre in New Zealand, as well as an interest in the Rockingham Shopping Centre in Western Australia. It also owns Ocean Keys in WA and the Royal Randwick in Sydney.