Strategic stake in FKP goes on the block

Stockland is to sell its strategic 14.9 per cent stake in FKP Property, with the cash raised of about $70 million to be used for new developments across the business, including the residential communities.

Stockland bought an initial 5 per cent interest in FKP in 2008 for about $2 a share but, after a series of capital raisings and share consolidations by both companies over the years, Stockland now has about 47.8 million of FKP's 321 million shares on issue, or about 14.9 per cent.

FKP is trading at $1.45 and last week said it was planning to divest its assets to focus on being a "pure play" retirement owner and operator.

Stockland chief executive Mark Steinert, pictured, said that as part of a strategic review of the business it was more cost effective to sell the FKP stake and focus on building his group's own retirement living assets.

He said it was more cost effective to build then sell units in a retirement village, but retain exposure to the management fees of the community centre and the assets.

"This becomes a capital-light model," Mr Steinert said.

"The stake in FKP is no longer classified as a strategic stake. But we are under no time pressure to sell and we will be aware of how we conduct the sale as we don't want to impact negatively on FKP when we sell down."

Mr Steinert ruled out the cash being used for mergers and acquisitions. The group had been touted as possible suitor for Australand.