Big deals on table spark talk of turnaround

A string of big-ticket deals looming in the commercial property sector is giving hope to the view that it has started the long climb back to health.

Any momentum could be given a kick as early as this week if, as expected, Melbourne group Salta – which boasts a $1 billion (Dh3.67bn) property portfolio – and Brisbane fund manager Opus Capital strike a deal. Peter Davidson, head of property at BT Investment Management, said commercial property's slow but steady comeback is reminiscent of the "are we there yet?" whinge from the children in the back of the car on holidays.

"We are not quite there yet. We are still floating but we're not there yet," Davidson told Herald Sun.

The likely deal between Salta and Opus follows a spate of good news that includes Mirvac entering into due diligence to buy the $1bn Westpac Office Trust and Grocon's confirmation it has the funding to go ahead with an $800 million Sydney office project.

Grocon's CEO Daniel Grollo has also outlined plans for a real estate investment trust that would contain about $1bn worth of office buildings. A shortlist to buy the management rights to Orchard Funds Management's $1.5bn portfolio is also being drawn up.

The trickle of deals is a welcome relief for the sector after a mooted $340m float of Salta's industrial assets was abandoned.

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