Centuria drops trust float plan in shaky market
After a book-build process, which was supported by private investors, the underwriters fell short with the institutional investors. It was said the property developer Terry Agnew, was asked to take a higher stake than his original 19.9 per cent.
The proposed float owned one asset, the Northpoint Tower in North Sydney, which it bought from Mr Agnew to seed the trust.
The chief executive of Centuria, Nick Collishaw, said while he was disappointed, there were plans to revisit the float in early calendar 2014, "when we hope market conditions have improved".
"Whilst there was good support for the Trust's strategy and management, Centuria is disappointed the offering did not receive sufficient demand to complete the IPO notwithstanding the strong lead from domestic and Asian retail investors," Mr Collishaw said.
"Centuria remains committed to delivering quality real estate investment funds for its clients and retains its aspiration to create a listed real estate funds management platform."
The cancellation followed the recent shelving of the $367 million Pacific Retail REIT, which planned to buy four suburban malls from CFS Retail, including the Rosebud Plaza, in Victoria.
The advisers, Moelis & Co, also blamed the volatile sharemarket and uncertainty in the lead-up to the September 7 federal election, on the decision not to proceed.
Fund managers said the two floats offered solid yields but that the assets were small and market conditions remained uncertain for retail and smaller office trusts.
Investors are now keenly awaiting the details of the planned $200 million float by APN Property.
Frequently Asked Questions about this Article…
Centuria cancelled the $215.3 million float after a book‑build that attracted good private and retail interest but left underwriters short of commitments from institutional investors. Advisers also pointed to a volatile sharemarket and election‑related uncertainty as key reasons the IPO did not proceed.
The proposed trust would have owned a single asset: the Northpoint Tower in North Sydney, which Centuria bought from property developer Terry Agnew to seed the trust.
Terry Agnew, who originally held a 19.9% stake, was reportedly asked to take a higher stake in the trust as part of the book‑build process, but the overall institutional demand remained insufficient to complete the IPO.
Nick Collishaw said he was disappointed but indicated Centuria planned to revisit the float in early calendar 2014 when market conditions had (they hoped) improved, and reiterated the company’s commitment to delivering quality real‑estate investment funds and building a listed funds management platform.
Advisers including Moelis & Co blamed a volatile sharemarket and uncertainty in the lead‑up to the September 7 federal election for weakening institutional demand, a factor that contributed to the decision not to proceed with small retail and office trust floats.
Yes — the cancellation followed the recent shelving of a $367 million Pacific Retail REIT float, which had planned to buy four suburban malls from CFS Retail (including Rosebud Plaza in Victoria).
Fund managers said the two recently offered floats provided solid yields, but they noted the assets were small and that market conditions remained uncertain for retail and smaller office trusts, which reduced appetite from institutional investors.
Investors are awaiting details of a planned $200 million float by APN Property, which market participants are watching for signs of improving conditions for property trust IPOs.
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