Brookfield Asset Management is to create a $US900 million ($865 million) property trust in April through the distribution of a special dividend to shareholders, it was announced at the weekend.
Under the plan the group, which owns Multiplex in Australia, will place a majority of its commercial assets into the new trust, Brookfield Property Partners (BPY), as part of a consolidation of its business units.
Shareholders will get one BPY unit for every 17.42 Brookfield shares. The dividend is estimated at about $US1.45 per Brookfield Class A or B share, or about $US900 million in the aggregate.
Immediately after the distribution, BPY will effectively be owned by Brookfield shareholders (7.5 per cent) and Brookfield (about 92.5 per cent).
The group said the new trust will be Brookfield's flagship commercial property company and the primary entity through which Brookfield will execute its global commercial property operations. BPY's goal is to be the leading global investor in "best in class" commercial property assets.
The plan comes amid speculation that Brookfield Multiplex is contemplating a float of its Australian property assets, which includes office towers throughout the country. Australian analysts have said a float would be well received as the assets are of a high quality.
There are only a handful of Australian office-focused listed real estate investment trusts for shareholders.
"BPY will own substantially all of Brookfield's commercial property operations, including its office, retail, multi-family and industrial assets," the company said.
"BPY's portfolio will include interests in over 300 office and retail properties encompassing more than 250 million square feet (23 million square metres).
"In addition, BPY will have interests in about 12,200 multi-family units, 7 million square feet of industrial space and an 18 million square foot office development pipeline."
BPY's distribution policy is for an initial payout ratio of about 80 per cent of its funds from operations and is initially pursuing a distribution growth rate of between 3 per cent and 5 per cent annually. It is expected to be $US1 per unit a year.