Macquarie Group sells out of $12bn Investa office empire

The bank took a half interest in the management business when it was still in play two years ago and it sold its interest to Canada’s Oxford Property Group.

Oxford had long wanted to be involved in the management business and it identified Australia as a base for expansion.

Oxford won a fierce takeover battle for the Investa Office Fund against US private equity outfit Blackstone in 2018 when office towers were the hottest sector in commercial property.

Macquarie has been profitably selling down some positions it took in property fund managers in the last cycle and this year sold its stake in the Asia-based Logos Property Group.

The investment bank pulled back from property in the wake of the financial crisis but later made a series of investments in property operating businesses that generated lucrative returns.

Oxford will now have a greater say in both how the former Investa Office Fund, which had a $4.5bn portfolio when it was taken private, and its unlisted sister vehicle, the Investa Commercial Property Fund, are managed.

ICPF had bought the entire management platform in 2015 as Morgan Stanley exited from Investa and Macquarie Capital’s principal investment arm then took a half stake in 2018.

The remainder of the office management business is still owned by the ICPF, which owns interests in buildings including Deutsche Bank Place in Sydney.

Following Oxford’s $4.5bn acquisition of IOF, now known as the Oxford Investa Property Partnership, Investa has been Oxford’s local property, development and asset management partner for its portfolio

The partnership has yielded strong returns as 13 assets were sold out of the original IOF portfolio which raised $2.8bn in proceeds when office tower prices were booming. It has also undertaken two redevelopments at 388 George Street and 347 Kent Street in Sydney’s CBD.

Investa will expand ties with Oxford and will also work with the Canadian group to implement its build-to-rent investment strategy in Australia, the first asset of which is Pitt Street South overstation development project in Sydney.

Oxford head of Australia Alec Harper said the move was a “natural next step” for the company. “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,” he said.

Oxford is backing the recovery of Australia’s office towers saying the country is one of its “highest conviction” markets.

ICPF chair David Baffsky said Oxford was an “aligned and complementary” partner.

This article originally appeared on www.theaustralian.com.au/property.