MA Financial makes retail splash with IPGeneration funds buy

IP Generation has bought Stockland Glendale for $315m

The listed MA Financial Group has inked a deal to buy the growing IPGeneration property funds operation and will look to grow it as the retail property sector is in a sweet spot.

The listed company, which counts Andrew Pridham as vice chairman, is buying the Melbourne real estate investment management for $90.4m, to be paid mainly in shares.

The business, which controls a $2bn shopping centre empire, will be integrated into the existing MA Financial real estate platform, which spans pubs, shopping centres and marinas.

The move will grow the listed firm’s real estate empire to about $8bn and overall assets to more than $12bn. Set up in 2018, IPGeneration manages about $2bn of retail shopping centre assets across ten funds that own 14 shopping centres located in NSW, Queensland, Victoria and WA.

MA Financial joint chief executive Julian Biggins said IP Generation had an impressive record in securing assets, raising capital and delivering strong returns. The group was at the vanguard of a group of nimble funds houses, including Haben and Fawkner, that snapped up assets that were unloaded by larger institutions as they came under pressure to sell.

It picked up centres including Stockland Glendale in NSW, Craigieburn Central in Melbourne and a 50 per cent interest in Rockingham Centre in WA.

IPGeneration has also proven up its strategy by profitably selling off one early asset, in Victoria’s Corio, after boosting its performance.

The deal is expected to give MA Financial’s own business a boost as it will have more scale and expertise on board and larger companies and funds remain under pressure to sell assets.

There will be 29 real estate investment professionals joining MA Financial’s real estate asset team and the overall business will run about $8bn in core, alternative and real estate credit assets.

IPGeneration founder and chief executive Chris Lock will become head of core real estate at MA Financial. The firm’s chairman David Blight, a former ING Real Estate global, and director Greg Miles, an ex-Scentre senior executive, will also join MA Financial.

The $90.4m purchase price represents a multiple of 7.9 time earnings and includes an $80m upfront component, with deal billed as accretive to MA Financial’s underlying earnings per share this financial year.

Mr Biggins said the acquisition builds scale in the firm’s core real estate business at an attractive once in a cycle opportunity in the real estate market.

“This acquisition will mutually benefit our many investor clients, which aligns with our philosophy of achieving win-win outcomes for clients, shareholders, and staff,” he said.

Mr Lock said the two companies had a strong cultural fit and alignment. He said the scale of the combined business “enables us to deliver even better opportunities and investment returns to all our clients in the future”.