GPT taps Charter Hall’s Proutt as CEO after long search

The diversified property trust’s long search for a new chief executive has ended after it hired a senior Charter Hall exec to helm the $7.53bn company.

Listed real estate investment trust the GPT Group has ended its long search for a new chief executive by tapping finance executive Russell Proutt to head the company.

He will replace outgoing CEO Bob Johnston after an executive hunt that kicked off when the incumbent announced in February this year that he would stand down.

The appointment of Mr Proutt, Charter Hall’s chief financial officer, to the post came after a slew of high-profile executives were linked to the role at the helm of the$7.6bn diversified property group.

They included former Mirvac Group executive Brett Draffen, who instead took up a job as CEO at Australia’s oldest private property developer Lewis Land Group. Former Charter Hall Retail REIT executive director Greg Chubb, who is currently the chief operating officer of Hong Kong-based Link REIT, was also reported as being a candidate under consideration.

An artists impression of GPT Group's plans for the Highpoint urban village development in Melbourne.

Brookfield and former Dexus and Stockland executives were also named as potential candidates in the long-running search guided by advisers Russell Reynolds and Associates. The internal candidate had been reported as GPT’s CFO Anastasia Clarke.

Mr Proutt was not reported as among the contenders and may have to serve out a six-month notice period. He is anticipated to commence with GPT no later than March 25, 2024.

Mr Johnston will continue as CEO until the incoming chief commences, and will work closely with the board and his successor to ensure a smooth transition.

Property players said Mr Proutt was a relatively unknown quantity. “That is totally out of left field. Having said that, he’s a good operator,” one executive said.

Citi analyst Howard Penny said the appointment was a positive and “potentially could remove one of the overhangs on the stock as strategic direction, management stability and certainty are achieved”.

The incoming CEO has more than 30 years in global property markets, funds management, mergers and acquisitions and finance, having held senior leadership positions most recently as chief financial officer at Charter Hall and prior to that at Brookfield Asset Management.

GPT chairman Vickki McFadden said the board conducted an extensive selection process and is “confident Russell has the leadership capability, strategic insight and track record to lead GPT through its next phase of growth and will bring a strong focus on long term value creation for investors”.

Mr Johnston said GPT had a “strong team” of experienced and talented people, adding he was “confident in the future of GPT under Russell’s new leadership”.

Mr Proutt has been CFO of Charter Hall since 2017. Prior to joining he was with Brookfield Asset Management for 12 years as a managing partner based in Canada and, more recently, Australia, where he worked in property and infrastructure sectors across the Asian region.

Mr Proutt will receive pay of up to $6m annually and will also be paid by $2.83m in five tranches by GPT as compensation for missing out on Charter Hall performance rights. His pay package is $1.5m per annum fixed for a period of three years with a short term scheme worth up to $2.25m and long term incentive plan worth up to $2.25m.

GPT has stabilised since its disastrous foray into offshore investing with failed investment bank Babcock & Brown before the GFC, but its $32bn platform is facing challenges as commercial property values decline.

The group is trying to sell unwanted office towers and shift into the fast-moving logistics sector. It has also sold off large shopping centres as their values fall, but the company has also picked up retail mandates.

Under Mr Johnston it sold out of key office buildings including a 50 per cent interest in MLC Centre for $800m in 2019 and a quarter stake in Sydney CBD landmark 1 Farrer Place for $584.6m in 2020. It also struck a major logistics venture with Canadian group QuadReal.

But GPT has relatively high vacancy levels in its office blocks and has not successfully undertaken mergers since taking over its own listed office fund in 2016.

The company counts UniSuper as its largest investor with 16.3 per cent, followed by Blackrock with 10.25 per cent. GPT securities dipped by 4.5c to $3.92 in early morning trade.