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UPDATED: DPF doubles portfolio on PFI contract, mum on price

Friday 30th September 2011

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DPF Management, a closely held, Auckland-based property group, has agreed to acquire the management contract for NZX-listed Property For Industry from AMP Capital Investors, almost doubling the size of the portfolio it oversees.

Terms of the deal were confidential, said Greg Reidy, director of the DPF unit that will hold the contract, PFIM.

The contract “is not being internalised at the expense of shareholders,” Reidy told BusinessDesk. “It is the assignment of the management contract from AMP.”

DPF has six shareholder groups and its owners include Malcolm McDougall, one of the founders of PFI and its executive director until he resigned in August 1999.

The transaction gained approval from PFI’s two independent directors, following their review of PFIM, AMP Capital said in a statement.

DFI’s existing property portfolio is valued at about $390 million and PFI owns 50 industrial properties valued at $351 million.

The company “always had additional capacity in our business” and the industrial property sector is stable, with good demand, Reidy said.

Shareholders of PFI haven’t raised the prospect of internalising the management contract, as has happened to other trusts in the listed property sector, Reidy said. This probably reflects its relatively good performance, he said.

AMP Capital reaped $933,000 in management fees in PFI’s first half, down from $962,000 a year earlier. PFI’s first-half revenue fell 2.5% to $15.6 million and profit was little changed at $8.3 million.

Shares of PFI rose 0.9% to $1.17, valuing the firm at $256 million. They have slipped about 14% in the past five years.

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