There’s renewed speculation that the country’s largest listed office landlord Dexus (ASX: DXS) could have entered into merger talks with GPT (ASX: GPT), the country’s oldest property trust.
Any future mergers may be shelved until market volatility around United States President Donald Trump’s tariff mayhem is over.
However, the renewed M&A speculation follows confirmation that New York private equity firm Blackstone again assessed Dexus for a possible buyout.
Given that both REITs have diverse baskets of complementary commercial property assets, a merger between Dexus and GPT is expected to create synergies that could accelerate future growth.
Complementary portfolios
Included within Dexus’ $14.8 billion portfolio of real estate and infrastructure assets are iconic landmarks like Sydney’s MLC Centre and 360 Collins St in Melbourne. In addition, there are airports and other key infrastructure assets.
Its portfolio sector breakdown includes:
- Offices: $20 billion.
- Industrials: $11 billion.
- Retail: $9 billion.
- Healthcare: $1.7 billion.
- Alternative assets: $1 billion.
Dexus has $53.4 billion in funds under management (FUM), including $38.9 billion for third parties.
By comparison, GPT has $34.1 billion worth of assets under management (AUM), including $4.9 billion in retail, $3.6 billion in office and $3.8 billion in logistics.
Merger strength
Assuming it happens later this year, a Dexus-GPT merger would mark one of the largest M&A deals for 2025 and create a $15 billion-plus REIT based on both companies' market value.
The deal would also create a $60 billion FUM operation, which would give it the scale to compete with its global rivals including Blackstone and Brookfield.
Dexus has a market cap of $7.5 billion making it the 66th largest company on the ASX. The share price is down 5.77% over 1 year and up 5.41% year to date.
APT has a market cap of $8.4 billion making it the 64th largest company on the ASX; the share price is up 4% in 1 year and up 0.92% year to date.
One of GPT's largest investors, Unisuper (14%) may decide whether or not a future merger progresses.
It’s understood that Dexus has been in dispute with UniSuper and Cbus Property for control of its half-stake in Sydney’s Macquarie Centre shopping mall, valued at $830 million.
Dexus will now be forced to relinquish the asset after a court sided with the superannuation giant and forced the ASX-listed landlord to sell.
The two industry super funds accused Dexus of breaching a pre-existing agreement when it acquired its half-stake in the $1.7 billion mall.
