Two of Centuria's listed property trusts will merge to create a $600 million fund aiming to be "the largest metropolitan office-focused REIT on the ASX."
Centuria Metropolitan REIT (ASX: CMA) invests in office and industrial real estate at valued at $392 million; while the Centuria Urban REIT (ASX: CUA) has three offices worth about $210 million.
The move was backed by 99.9 % of unitholders at Centuria Property Funds' extraordinary general meeting this week.
Chair John Slater told investors the merger will have the benefit of reducing ongoing base management fees; scale and diversification; and significantly increase distributable earnings.
CMA Trust manager Nicholas Blake said: "Investors in the expanded CMA will continue to benefit from Centuria Capital's expertise and dedicated management of metropolitan assets."
Blake added with the expected financial benefit driven by economies of scale from the merger, CMA should be able to reduce its cost of capital and make additional acquisitions possible.
Centuria Listed Property Funds chief executive Nicholas Collishaw said the combined portfolio is valued at $600 million with a market cap of approximately $430 million, making it a "strong candidate for inclusion into S&P ASX 300 index."
Parent company, ASX-listed investment manager Centuria Capital Group has about $3.8 billion in funds under management.