The largest publicly listed office landlord in Australia, Dexus Property Group had entered into an agreement with the Canada Pension Plan Investment Board with the Commonwealth Bank of Australia to purchase the bank's office trust for AUD2.83 billion or USD2.66 billion.

Dexus and CPPIB had made a cash and stock offer previously set at AUD1.15 per share to AUD1.2052 per share. This was confirmed by Dexus through a regulatory filing. The statement also set a timetable of mid-December for the finalization of a binding agreement.

The takeover would be the latest investments done in Australian property done by CPPIB. It would add on to the Toronto based fund about CAD5.8 billion of investments in Canada. Dexus agreed to purchase 14.9% interest in the fund back in August after Commonwealth Bank had planned to leave the property business. The company would own and manage one fourth of the commercial buildings in Sydney after the takeover.

The revised proposal for the share purchase was made after the Commonwealth Property Office Fund had disapproved the application last October 14. This was because the offer was nearly equal to the net tangible assets of the fund, set at AUD1.19 per share last October 31.

In response, Dexus had repriced the bid because it said the recent valuations had pushed up the values of the properties of the company, creating an impact upon the net tangible asset's valuation.

Share prices on the bouse for Dexus climbed by 0.9% as it closed on Sydney trading at AUD1.07 per share. The business of city center office vacancies increased by 11.3% n the past three months to September 30. This was the highest valuation since the first quarter of 1999. Aside from the pricing, business confidence is improving and demand stabilizing, as confirmed by an October 16 report from real estate broker Jones Lang LaSalle Inc.