The amount invested for the cornerstone stake is up to AUD$42.6m
AMP Capital Investors has entered into an agreement to acquire 50% of MacarthurCook Industrial REIT’s (MI REIT) management and property management companies and taking a cornerstone stake of up to 19.2% in MI REIT. The amount invested for the cornerstone stake is up to AUD$42.6m.
The company said that the proposed transaction involves AMP Capital Investors acquiring 50% of the Singapore REIT management and property management companies that manage the Singapore Exchange-listed MacarthurCook Industrial REIT from MacarthurCook Limited, a subsidiary of the AIMS Financial Group; AMP Capital Investors becoming a cornerstone investor in the listed MI REIT by acquiring up to approximately 19.2% of MI REIT; and AMP Capital Investors selling four high quality Singapore industrial assets to MI REIT.
The proposed transaction allows MI REIT manager to retire AUD$27.7m in debt, diversify its portfolio revenue streams by acquiring premium industrial assets, and strengthen MI REIT’s capital base, the company said.
According to AMP, a stronger capital position and reduction of its leverage to approximately 29% will help underpin the unit price and allow MI REIT to be positioned to take advantage of future growth opportunities. MI REIT will continue to manage the portfolio of high quality assets with the aim of delivering value and consistent returns to unitholders.
Reportedly, in the new joint venture, the MI REIT management team will continue with Mr Nicholas McGrath as CEO. The MI REIT Board will include two AMP Capital nominated directors. The Singapore joint venture will be known as AIMS AMP Capital Industrial REIT Management and MI REIT will be rebranded and trade as AIMS AMP Capital Industrial REIT from December 28, 2009, subject to approvals.
Simon Vinson, head of Asian Property at AMP Capital Investors, said: “This is an excellent opportunity for AMP Capital to enter the Singapore REIT market by taking a cornerstone stake in MI REIT, and at the same time leverage our property investment expertise through forming a long term joint venture with a property management company which has a strong track record in real estate funds management in the Asia Pacific.
Nicholas McGrath, CEO of MI REIT, said: “With AMP Capital, an internationally respected funds management company, joining us as both a key investor and joint sponsor of our REIT, we are now better positioned to tap opportunities in Singapore and across Asia. If approved by our unitholders, MI REIT can potentially deliver more value to unitholders over time.”