Unhappy with AMP Capital: property managers move

Carmel Hourigan, who is departing AMP Capital for a new role at Charter Hall. Picture: Chris Pavlich

Dexus Property Group and other property managers are believed to be in talks with AMP Capital investors, in a quest to take control of the funds within its $30bn real estate empire.

Macquarie Group and Charter Hall may also have had some discussions with investors about the same move, say sources.

AMP Capital’s real estate funds count among investors some of the country’s most powerful superannuation managers, such as UniSuper and Sunsuper, and it is understood that discontent has been growing for some time about performance.

However, AMP is also a significant investor in the funds and some market analysts believe wrestling control from the financial group is unlikely to be easy, although possibly one of the funds could switch managers.

 

AMP Capital’s assets include office assets such as Sydney’s Quay Quarter development at 50 Bridge Street, slated to be completed in 2022, and Bourke Place, Melbourne. Shopping centre assets in its portfolio include Sydney’s Macquarie Centre and Indooroopilly Shopping Centre in Brisbane.

Some investors are understood to have grown unhappy with their real estate returns at a time that shopping centre landlords face the prospect of lower incomes as retailers deal with COVID-19 trading restrictions and disruption from online sellers.

The acquisition of Indooroopilly Shopping Centre has also been controversial, with some suggesting that the AMP Capital Shopping Centre Fund and the AMP Capital Diversified Property Fund paid top dollar when they outlaid $800m for a 50 per cent interest in the property about three years ago.

The latest discussion in the market comes after Charter Hall announced on Wednesday that it had hired AMP Capital’s outgoing head of real estate, Carmel Hourigan, to head up its office business, replacing Adrian Taylor.

Her departure, and that of other senior executives, follows the controversial decision by AMP to appoint Boe Pahari as head of AMP Capital despite a $500,000 fine for sexual harassment.

As reported by The Australian, three other senior executives have also left AMP Capital in a shake-up at the financial giant.

Ms Hourigan’s appointment to Charter Hall comes after a year during which the real estate funds manager has been highly acquisitive.

Charter Hall has been making strides towards growing its empire beyond $38.9bn of funds under management, as it closes in on a portfolio of Caltex petrol station sites and recently snapped up properties owned by glass manufacturing company Owens Illinois.

Speculation emerged last year that property investors such as Charter Hall and Blackstone had their eye on AMP’s real estate empire, but this was dismissed.

The suggestions at the time were that the $6bn investment manager could be subject to a break up play on the back of a period of underperformance by AMP, which posted a $2.5bn loss for 2019.

At Charter Hall, the understanding is that Ms Hourigan, who is highly regarded in the industry, would be in line to replace its boss David Harrison when he departs, although he has no current plans to leave the company.

Dexus Property Group, headed by Darren Steinberg, has $33.8bn funds under management and controls $16.8bn of office, industrial and healthcare assets. It also has a $17bn funds management portfolio, which predominantly owns some of the country’s office and retail properties.

In February, the $9.95bn listed company reported a $994.2m interim net profit.

AMP Capital declined to comment.