Unitholders in the A$5.4bn (β¬3.5bn) AMP Capital Diversifiedβ―Property Fund (ADPF) have voted to merge the fund with the A$10bn Dexus Wholesale Property Fund (DWPF) to create Australiaβs second-largest property fund.
Unsettled by corporate uncertainty within AMP group, unitholders, including some of Australiaβs largest industry super funds, approached Dexus last year to take over the fund.
ADPFβs independent board endorsed the merger proposal from Dexus, despite repeated offers from AMP to cut fees and to sell assets to pay out redemption requests, totalling around $2.2bn.
More than 90% of unitholders voted at a meeting to approve the proposal to merge with DWPF.
Deborah Coakley, Dexus executive general manager, funds management, told ΒιΆΉΣ³» Real Assets: βAfter a long period of investor consultation, it is great to see these portfolios come together.β
Dexus has agreed to contribute around A$400m of upfront liquidity to redeeming ADPF unitholders.
The liquidity would be provided through acquisition of existing ADPF assets, subject to approvals.
Dexus said that should this approval not be secured, Dexus would seek alternative methods of providing the liquidity.
The ADPF portfolio includes stakes in assets such as Sydneyβs Quay Quarter Tower (50% interest), which is currently under construction, and three super-regional shopping malls. ADPF assets also include minority investments in two other AMP Capital-managed wholesale funds.
Michael Sheffield, fund manager, DWPF, told ΒιΆΉΣ³» Real Assets: βThe merger improves diversification and reduces fees, while providing investors with exposure to iconic assets such as Quay Quarter Tower without incurring transaction costs.β
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