Herbert Smith Freehills has advised Commonwealth Bank of Australia (CBA) on its exit from its property funds management and property asset management platform. The property platform provided management services to three listed trusts with over A$20 billion in property assets under management.
The trusts were CFS Retail Property Trust Group (CFX), Commonwealth Property Office Fund (CPA) and the Kiwi Income Property Trust (KIPT). The platform also included various unlisted wholesale funds and third party property mandates.
The exit involved the separation of four distinct and well established businesses from the CBA Group and transitioning each of these to new owners. To that end, Herbert Smith Freehills has provided advice to CBA on the following:
- The internalisation of the management rights for CFX by way of a sale of various entities for a consideration of approximately A$475 million. This included the transition of over 800 employees to the new CFX group, along with a corresponding sale of the wholesale property business to CFX security holders;
- Two competing take private bids for CPA which were made by The GPT Group and a consortium comprising DEXUS Property Group (DEXUS) and Canada Pension Plan Investment Board (Consortium), with the Consortium ultimately securing 100% of CPA for a deal value of A$3 billion and agreeing to facilitation arrangements for the transition management rights for CPA to DEXUS; and
- Australian aspects of the internalisation of management rights for KIPT.
The Herbert Smith Freehills team was led by partner Tony Damian and consultant Jim Graham, with support from executive counsel, Nicole Underhill, senior associate Clayton James, and solicitors Yorick Ng and Alexandra Eggerking. The team worked closely with the CBA Legal team, led by David Cohen, the Group General Counsel of CBA, and Senior Legal Counsels, Derek Culey and Kelly Brown.
Tony Damian commented: “While internalisations are common in the property sector, the sheer size and complexity of CBA’s platform, along with the competitive bids for CPA, presented unique challenges. We are delighted to have advised CBA on these significant transactions.”
Tony Damian has previously advised CBA on transactions including its A$2 billion acquisition of BankWest and its A$10.1 billion acquisition of Colonial.
