Substantial interest is expected for the $2.5 billion Investa Land business, which is for sale as Morgan Stanley Real Estate Investing exits the Investa Property Group. Morgan Stanley has invited interested parties to make offers for the land development business, which has a pipeline value of more than $4.3 billion. Documents obtained by The Australian Financial Review show the business has generated about $1.6 billion of revenue since 2008 and has a total realiseable value of more than $2.5 billion. The development business could be sold to one buyer along with the wider Investa platform but sources suggested Investa Land was more likely to go separately, given the appetite for large-scale residential land development.
Morgan Stanely and UBS are advising on the overall Investa Property Group sales process, which includes both Investa Land and Investa Office. The Investa Land development platform consists of 11 residental and industrial projects located primarily on the east cost of Australia. This includes more projects located primarily on the east coast of Australia. This includes more than 10,000 residential lots and more than 550 hectares of industrial land.
The residential portfolio has seven projects with a total realiseable value of $1.9 billion, or just over 75% of the overall value of the Investa Land business. The primary exposure is to Queensland, followed by Victoria and NSW. Most of the project are in the production stage of development. Among the most recent projects is a $90 million residential project in East Maitland near Newcastle in northern NSW, which Investa won approval for last year. One potential candidate could be Defence Housing Australia. Investa has a partnership history with DHA which has provided it with development and management services in the past. DHA, a float candidate, could look hard at Investa and to bolster its portfolio.
Source: Australian Financial Review - Tuesday 24th March 2015