Canada’s Oxford Properties Group has secured a 50 per cent stake in the management platform of office landlord Investa, taking control of $12 billion in commercial assets under management.
Oxford, the real estate arm of OMERS—one of Canada’s largest pension plans—bought Macquarie Group’s stake in Investa Office Management Holdings.
The investment bank, which has been profitably selling down some positions it took in property fund managers last cycle, has continued to pull back from property, last year selling out of its stake in the Asia-based Logos Property Group.
Oxford entered the Australian market through the $4.5 billion purchase of the Investa Office Fund, now Oxford Investa Property Partnership, in December 2018, and development collaboration with Grocon at Barangaroo Central, now taken over by Sydney developer Aqualand.
Oxford won the long-running battle to take over Investa Office Fund after its rival, Blackstone, which was unable to match or beat Oxford's offer.
In the two years since completing the acquisition, Oxford has executed a divestment program of 13 assets from the original portfolio, raising $2.8 billion, while also leasing upwards of 100,000sq m of office space and completing two projects at 388 George Street and 347 Kent Street in Sydney.
“Our relationship with Investa has grown from strength to strength since our acquisition of Investa Office Fund and the formation of Oxford Investa Property Partnership, so it was a natural next step for Oxford to take a substantial equity position in Investa Office Management Holdings,” Oxford Properties head of Australia Alec Harper said.
“The investment gives Oxford immediate access to a best-in-class operating platform, which will become our partner as we look to grow our presence in Australia.”
The investment into the platform will bolster Oxford’s operations in the local market, bringing Investa on board to partner on its $12 billion in assets under management.
Investa will also work with Oxford to implement its multi-family investment strategy in Australia, the first asset of which is 65,000sq m Pitt Street South over-station development project in Sydney.
The consortium, including Grocon and CPB Contractors, will begin work at Pitt Street in 2021 with the build-to-rent tower scheduled to complete in 2023, and the office tower to be finished in 2024.
Oxford is backing the recovery of Australia’s office towers despite a transference of work to the suburbs, highlighting its focus on prime grade office assets in the major Australian CBD markets.
“Australia is one of our highest conviction markets and our largest presence in Asia Pacific,” Oxford Properties head of Asia-Pacific David Matheson said.
“The investment is a natural fit; our investment into Investa Office Management Holdings gives immediate scale to our on-the-ground capabilities in Australia and will accelerate our ability to deploy capital in this market.
“We believe we can help grow Investa Office Management’s fund management business through our access to capital and deep relationships with global institutional investors.”