GPT unitholders approve Babcock venture

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Unitholders of Australia?s General Property Trust voted on Thursday to drop property group Lend Lease as its manager, approved the creation of a joint venture with investment bank Babcock & Brown and the plan to sell some of its best assets to Westfield, the trust?s larger competitor.

Sydney-based Lend Lease, which created GPT in the 1970s and has managed it since, has fought a long battle to convince the trust?s unitholders to reject GPT?s proposals, saying they contained numerous flaws.

On May 11, It admitted partial defeat by agreeing to hand over management to the trust?s internal team as long as the proposals regarding Babcock and Westfield were rejected. The offer was slammed by GPT, saying it had not been consulted.

Lend Lease first put GPT into play last year with a A$7.2bn (US$ 5.6bn) bid subsequently matched by property group Stockland.

But the trust?s management team came up with its own plan earlier this year, including the venture with Babcock.

On Thursday, fifty-six per cent of votes were in favour of the trust?s proposals.

The 50:50 joint venture with Babcock will have initial capital of A$1bn. It will buy interests in assets from Babcock?s existing European real estate portfolio. GPT said the venture would lead to an annual 6.6 per cent increase in distribution per security over the next two years.

GPT also plans to sell 50 per cent of its regional shopping centres, Penrith Plaza and Woden Plazas, and 25 per cent of Sunshine Plaza, to Westfield, which holds a 6.53 per cent stake in GPT.

The trust on Thursday raised the forecast of its fiscal year distribution to 27.5 cents per unit, up 16.5 per cent from the previous forecast.

Lend Lease stands to lose about A$230m in annual management fees from parting ways with GPT.

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