Morgan Stanley Property Group said to eye Australian share sale

SYDNEY: Investa Property Group, an Australian real estate company owned by Morgan Stanley funds, plans to raise as much as A$750 million (RM2.3 billion) in an initial public offering of some assets, two familiar with the matter said.

Investa plans to bundle several office towers into a fund to be listed in Sydney, the people said, declining to be identified because the proposed transaction isn’t public. Investa may sell shares this year, one of the people said.

An offering would follow IPOs planned this year in Australia by Myer Group Pty, the country’s largest department store chain, and outdoor equipment retailer Kathmandu, after the benchmark S&P/ASX 200 Index surged 52% from a March low.

"A lot of people have been underweight property and are looking to rebuild their exposure," said Angus Gluskie, who manages about A$300 million at White Funds Management Pty in Sydney. "Cyclically, we’re getting to the end of the downward property spiral."

The Investa deal may be the first Australian real estate IPO since Macarthurcook Industrial Property Fund sold shares in December 2007, according to data compiled by Bloomberg. The S&P/ASX 200 A-REIT index, which tracks real estate investment trusts traded in Australia, has climbed for two quarters, after declining for six quarters.

Nick Footitt, a spokesman for Morgan Stanley in Hong Kong, was unable to comment immediately. A message left at Investa’s media office in Sydney wasn’t immediately returned.

Property deals
Morgan Stanley Real Estate funds agreed to buy Investa, based in Sydney, in May 2007 in an A$6.6 billion takeover. Investa was the country’s biggest publicly traded property owner and the deal was the largest overseas acquisition of Australian real estate.

It’s not yet clear which offices will be included in the IPO, according to the Australian Financial Review, which reported Investa’s plans earlier today.

Investa owns and manages 47 office blocks across Australia, and controls about A$8.1 billion of real estate assets, the company’s website says. Sydney properties include the Norman Foster-designed 126 Phillip Street.

Morgan Stanley had A$70.4 billion of real estate assets under management as at March 31, of which A$20.2 billion were in Asia, according to the New York-based bank’s website.

Australia’s economy grew more than expected in the first two quarters of 2009, and the central bank this month became the first to raise interest rate among G20 nations since the height of the financial crisis.