Charter Hall enters into SIA to acquire Irongate Group

Mike Taylor

Managing Editor/Publisher, Financial Newswire

31 March 2022

Charter Hall managed partnership, comprised of Dutch pension fund PGGM and property group Charter Hall, has announced it has entered into a scheme implementation agreement (SIA) with Irongate Group, real estate investment manager.

Under the terms of the agreement, the partnership would acquire all Irongate’s stapled securities via trust schemes of arrangement, subject to certain conditions, the company said in the announcement to the Australian Securities Exchange (ASX).

Further to that, Irongate security holders would receive $1.90 cash per stapled security, which was in line with an indicative proposal of when Irongate was originally approached by Charter Hall managed partnership in February, earlier this year.

The Irongate’s board had unanimously recommended to its security holders to vote in favour of the transaction, subject to no superior proposal emerging and that the transaction was  in the best interest of its security holders.

Under the transaction:

• Charter Hall would own a 12% stake in the partnership, with PGGM owning the remaining 88% interest
• The partnership would fund the initial acquisition of IAP and post the asset sales would own a $1.6 billion portfolio of IAP’s industrial and office properties
• Charter Hall agreed to acquire Irongate’s funds management business for $5 million and associated co-investment takes for $22.5 million and the partnership would nominate Charter Hall as the acquirer of all of the units in Irongate Property Fund II on implementation of the transaction

Additionally, pursuant to the memorandum of understanding entered into with 360 Capital, the partnership agreed to sell three Irongate’s properties to 360 Capital for aggregate consideration of $256.7 million shortly after implementation of the schemes.

The transaction was not conditional upon 360 Capital completing the acquisitions, meaning the partnership would retain responsibility for funding the transaction.

The three buildings included 38 Sydney Avenue, Forrest, ACT (100% interest for $81.7 million), 34 Southgate Avenue, Cannon Hill, Qld (100% interest for $40 million) and 510 Church Street, Cremorne, VIC (50% interest for $135 million).