OzFree Online Real Estate

Australian real estate firm plans to raise as much as A$750 million ($680 million) in an initial public offering, two people familiar with the matter said. It was owned by Morgan Stanley from Investa Property Group. The company may bundle several office towers into a fund to be listed in Sydney, the people said, declining to be identified because the proposed transaction isn’t public. Investa may sell shares before the end of the year, one of the people said.

Morgan Stanley is tapping investors’ appetite for new stocks as the Australian market recovers from the biggest IPO drought in 16 years. The share sale would follow offers planned for this year by Myer Group Pty, the nation’s largest department store chain, and outdoor equipment seller Kathmandu, as the benchmark equity index heads for its best year since 1993.

“A lot of people have been underweight property and are looking to rebuild their exposure,” said Angus Gluskie, who manages about $300 million at White Funds Management Pty in Sydney. “Cyclically, we’re getting to the end of the downward property spiral.”
The Investa deal may be the first Australian real estate IPO since Macarthurcook Industrial Property Fund sold shares in December 2007, according to data compiled by Bloomberg. The S&P/ASX 200 A-REIT index, which tracks real-estate investment trusts traded in Australia, has climbed for two quarters, after declining for six.

“No decision has been made and we’re continuing to evaluate a number of options,” said Katie Barton-Harvey, a spokeswoman for Investa. Nick Footitt, a spokesman for Morgan Stanley in Hong Kong, was unable to comment immediately.

In Australia, the economy grew more than expected in the first two quarters of 2009, and the central bank this month became the first to raise interest rates among G-20 nations since the height of the financial crisis.