Stockland Corporation - proposed acquisition of General Property Trust (GPT).

Summary

Stockland Group proposes to acquire General Property Trust

Market definition

Stockland and GPT are two of Australia's largest property trusts, each owning a considerable number of investment properties, including, hotels, commercial office buildings, office parks, shopping centres and industrial buildings.

The target and acquirer have considerable exposure to the commercial and retail sectors, however there are only two areas of overlap that have the potential to raise competition concerns, namely:

1. The ownership and management of commercial buildings in and around the Sydney central business district; and

2. The ownership and management of retail shopping centres in metropolitan Sydney and certain regional areas of New South Wales.

Competition analysis

Despite Stockland and GPT each having extensive portfolios of property interests, the ACCC found that where Stockland and GPT own properties in close proximity, there are also other property owners who will act as a competitive constraint should the proposed acquisition proceed.

In the commercial buildings market, the acquisition will lead to a moderate increase in concentration around the Sydney CBD. However Stockland is likely to face on-going competition from other property trusts, wholesale trusts, syndicated owners and private owners who are all active in the market place.

If the acquisition proceeds, Stockland will own three of the top twenty shopping centres in the Sydney metropolitan area measured by lettable area. Other prominent shopping centre owners include Westfield, Centro and Gandel.

The ACCC also looked at the effect of the proposed acquisition in regional areas, and it was found that Stockland would continue to face on-going competition from rival shopping centres in major population areas such as Newcastle, Wollongong and Gosford.

Accordingly, the ACCC formed the view that the proposed acquisition would be unlikely to substantially lessen competition.

Initiation

Parties