KCL looks at new venture

Bryce Barnett said he was in no position to make any announcement about the next step . Photo / Stuart Monroe

Firm's assets total $850m and managing director predicts some action this year.

Executives running the country's biggest real estate syndicator, managing property assets valued at about $850 million, are examining a new venture, and a stock exchange listing is one option they may consider.

Bryce Barnett, KCL Property managing director, said nothing had been decided and assets from the syndication vehicle would not be part of any float, if that eventuated.

But he could be seeking a listing on the NZX or NZAX soon.

"We're actively looking at opportunities of becoming involved in some form of listed or unlisted fund, and that was our aspiration with our merger last year," he said.

He was referring to KCL Property as the big private vehicle created last year by his New Plymouth-based KCL Group and Cheryl Macaulay's Commercial Investment Properties, founded in Timaru.

The two had assets of $800 million under management early last year. Barnett said those assets had now grown to about $850 million, making KCL much bigger than many NZX-listed property businesses including Augusta Capital, Property For Industry, Vital Healthcare Property Trust, NPT and DNZ Property Fund.

But Barnett said he was in no position to make any announcement about the next step although he predicted some action this year.

"We're actively looking at a number of opportunities," he said, but he was vehement that no syndicated real estate was in the new venture.

"People have bought into syndicated properties, therefore we cannot and will not ask them to merge. We will only deal with commercial properties, and that covers industrial, large format retail and low-rise office," he said, refusing to specify the size or scale of the new business or how much could be raised via listing.

KCL Group and Commercial Investment Properties issued a letter to industry associates and potential investors last year saying they had agreed the terms of their strategic alliance and indicating its buying power.

"The new combined enterprise will have significant market presence with around $800 million of assets under management, a portfolio of over 160 properties across New Zealand and in Brisbane, a wider network of industry contacts and a larger pool of investors," the two said last year.

Barnett indicated the new venture was no sign of syndication failure.

"I think it's fair to say what we want to do is to be able to offer to the market different types of property investment and not just syndication and we're endorsing syndication because we believe it has an important place in the market," he said.

But the new venture could offer more liquidity.

"We'd like to think that our next move might be in various stages but we would be definitely taking a step this year, whether that's forming an unlisted fund or creating a listed fund or merging with an unlisted fund or unlisted fund," he said.

His comments follow a report this month on NZX-listed property stocks from Forsyth Barr, predicting new floats and big capital-raising deals.

One former listed-company executive working in industrial real estate said KCL was the subject of widespread speculation, and people in the sector expected its bosses to have a listed presence this year.

But he also foresaw some teething problems, saying syndicators did not always have the background or experience to give them the skills needed to head listed companies which required high corporate governance standards.

Barnett said KCL had been working with Peter Wall, former managing director of property for Brookfield Multiplex in New Zealand and ex-national president of the Property Council, now involved in plans to develop the National Ocean Water Sports Centre at Takapuna and ferries to Takapuna and Browns Bay.

Barnett refused to talk about whether the new venture was examining Brookfield Multiplex assets, including supermarket properties, and whether those would be at the centre of the new deal.