Singapore-based ARA Asset Management Limited has acquired a 19.5 per cent stake in Cromwell Property Group in a $405 million deal which should assist both companies with their local and overseas ambitions.
ARA picked up the stake from South Africa’s Redefine Properties which has been a long-term backer of the Brisbane-based Cromwell.
Redfine will still have a small stake in Cromwell, reducing its holding from 23 per cent.
ARA manages 11 public and private real estate investment trusts and nine private real estate funds with assets totalling around SGD40 billion across the Asia Pacific.
With an established presence in the region, ARA recently embarked on its global expansion with the establishment of a European platform and has also increased its presence in Australia through various investments in the last few years.
ARA was listed on the Singapore exchange but was privatised in 2017 in a leveraged buyout.
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“Asia Pacific remains a focus for ARA even as the company expands its footprint globally. We entered Australia in 2015 and have been steadily increasing our investments in the market over the last three years,” John Lim, ARA’s group chief executive said.
“Australia continues to offer strong investment and capital raising opportunities to support the growth of our funds platforms.”
Cromwell will look to draw upon ARA’s global networks as it seeks to boost its European presence and new Asian unit.
Cromwell’s European funds platform has €4 billion in assets under management. The company spun off some of its assets last year into the Cromwell European Real Estate Investment Trust which was listed in Singapore.
“I commented just last week that these investments would transform our business, and that Asia would be an increasing source of capital for value enhancing opportunities either in our property portfolio or our funds management business,” Paul Weightman Cromwell’s chief executive said.
Cromwell last week announced write-downs mainly in goodwill of $74.7 million on its European funds venture which saw it post a 47 per cent decline in after-tax profit to $80.8 million for the first half.
The ARA deal is subject to FIRB approval and certain other conditions.
Main image: Cromwell Property Group chief executive Paul Weightman.