AMP Capital buys out JV partner AMP Capital's stakes in AA REIT and manager

SINGAPORE (Nov 21): AIMS Financial Service Group is acquiring AMP Capital’s 50% stake in the management entities of AIMS AMP Capital Industrial REIT (AA REIT) and also the latter’s 10.26% stake in the REIT.

AIMS Financial Group currently owns a 50% interest in the management entities of AA REIT. This includes AA REIT’s manager AIMS AMP Capital Industrial REIT Management; AIMS AMP Capital Industrial REIT Management Australia as investment manager; and AIMS AMP Capital Property Management as property manager.

If completed, the acquisition will result in AIMS Financial Group becoming the 100% owner of the management entities of AA REIT and holding 17.88% of units in AA REIT.

The acquisition follows AMP Capital’s March announcement that it was undertaking a review of its ownership interests in the management entities of AA REIT as well as its principal stake in AA REIT.

“Following the completion of this review, AMP Capital and AIMS Financial Group have agreed to enter into the transaction,” says the manager of AA REIT in a Wednesday filing after market close.

AIMS AMP Capital Industrial REIT Management says the acquisition is expected to be completed next month.

Established in 1991, AIMS Financial Group is a diversified financial services and investment group, with businesses spanning Australia, China, Hong Kong and Singapore.

In July 2009, AIMS Financial Group acquired MacarthurCook, the parent company of MacarthurCook Industrial REIT (MI-REIT), the predecessor of AA REIT.

At that time, MI-REIT was facing a number of financial challenges and had a depressed market capitalisation of $60 million with assets under management (AUM) at around $544 million.

Following the acquisition by AIMS Financial Group, a recapitalisation exercise took place with MI-REIT raising equity to repay and refinance debt facilities and fund the acquisition of four properties from AMP Capital, thus resulting in a turnaround for the REIT.

As at March 2010, MI-REIT’s market capitalisation increased to $315 million and it gained the support of AMP Capital, which entered into a joint venture with AIMS Financial Group as sponsors of the REIT and rebranded MI-REIT as AA REIT.

Since then, AA REIT has steadily grown its AUM to close to $1.5 billion from $658 million as at the end of March 31 2010 through acquisitions, strategic asset enhancement and development projects.

George Wang (left), chairman and CEO of AIMS Financial Group and chairman of AIMS AMP Capital Industrial REIT Management, says, “AIMS has enjoyed a successful partnership with AMP Capital over the last nine years, and we now look forward to this next chapter in the evolution of AA REIT. Our footprint across Asia Pacific and extensive track record in managing real estate investments strongly positions AIMS Financial Group to ensure AA REIT continues to deliver stable and sustainable long-term returns to Unitholders.”

Koh Wee Lih (right), CEO of AIMS AMP Capital Industrial REIT, says, “The consolidation of interest within AIMS Financial Group is a significant development for AA REIT that provides continuity in the independent management of AA REIT’s assets. Over the past decade, AA REIT has grown from AUM of approximately $544 million to a fund with $1.5 billion worth of assets across a diversified portfolio of 26 high-performing properties in Singapore and Australia. We remain committed to our strategy to build a higher quality and resilient portfolio and will continue to maintain our focus on prudent capital management and disciplined investment.”

Year to date, units in AA REIT have fallen 6 cents to $1.30.