GPT Group (ASX: GPT) has announced it is selling its stake of the MLC Centre, time to buy shares?
GPT Group is one of Australia’s largest diversified property groups. It owns and manages a $24 billion portfolio of offices, logistics, business parks and prime shopping centres across Australia. It has been listed on the ASX since 1971.
GPT’s MLC Centre sale
GPT Group is selling its 50% stake of the MLC Centre to DEXUS Property Group (ASX: DXS) and the Dexus Wholesale Property Fund (DWPF), and has a binding agreement.
The sale price is $800 million, which is a 3% premium to the book value at 31 December 2018 and means the asset has achieved an annualised return of more than 20% a year over the past three years.
GPT CEO Bob Johnston commented on the sale, “The sale capitalises on the significant repositioning of the asset over the past five years.
“The proceeds from the sale will be reinvested primarily into our development pipeline, which we believe will generate better long term returns for investors.”
The divestment of the MLC Centre is expected to be neutral to earnings for GPT before any reinvestment of the sale proceeds and re-iterated its FY19 guidance of 4% growth per share of the distribution and funds from operations.
GPT Group has done well to achieve such a large sale price for its stake. If it can re-invest the proceeds sensibly then it could be decent alternative buy to typical ASX shares. However, I would much prefer the ETF in the free report below to be in my portfolio compared to GPT Group.
[ls_content_block id=”14948″ para=”paragraphs”]
