Corporate Australia has a history of companies getting a very soft run
at their first AGM. That certainly could have been the case for the newly liberated GPT
Group yesterday, after they won over crazy Jack Tilburn by promising to change the font in the annual report at a tea and
scones routine two weeks ago. How cheap is he?

However, this tiny GPT shareholder flew to Sydney yesterday and let fly
in what turned out to be an unscripted alliance with the property
writers from The Australian, primarily Paddy Manning,that injected some much-needed life into a meeting that otherwise would have been as dead as a dodo.

I got up about eight times over the two hour gathering and at one point read out a detailed extract from this story in The Weekend Australian about GPT’s recent over-the-top purchase of 50% of Melbourne’s Highpoint shopping centre, which included the following:

One source told The Australian the Besens had hoped
to get over $500 million for the stake, but were staggered at the
amount of money thrown at them by the fund managers. In the end, GPT
Group paid $621 million, claiming it would get an income return of 5.5%
in the first year. Industry experts still cannot make the deal stack up
on those numbers and say the price reflected a 4.8% yield on
Highpoint’s current income, the first time a big commercial property
asset has sold for a sub-5% yield in Australia. Even the Lowys,
unquestionably among the smartest, most aggressive retail property
investors in the world – could not believe the price paid for Highpoint.

This was the basis for my attack on last year’s sweetheart deal with
Westfield, when two prime GPT shopping centre stakes were sold at book
value to secure Lowy backing for the proposal to dump a 30-year
association with Lend Lease and endorse a new imbalanced joint venture
with the sharp lads at Babcock & Brown.

Lo and behold, only The Australian produced a decent report
of yesterday’s AGM stoush, although it didn’t confess to having their
own stories quoted at length in the attacks. The media works in curious
ways, doesn’t it? A paper reports something, an activist runs with it
and then the paper reports the activist’s public attacks, thereby
further confirming the validity of the original story which was
strongly contested by GPT.

Paddy Manning, the son of ABC legend Peter Manning, was also the founding editor of Ethical Investor
magazine, so it wasn’t surprising his story also took up GPT’s
interesting response to questions about the “catastrophe” near their
Ayers Rock
Resort in the Mutitjulu indigenous community.

After beating the drum on how great everything was at GPT it was
refreshing to hear both CEO Nic Lyons and chairman Peter Joseph agree
about the on-going tragedy in that community and the need for much more
to be done.

Peter Fray

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