Titans eye slice of CBA pie LEND Lease, Charter Hall, Brookfield, GPT and Dexus are all expected to throw their hats in the ring for chunks of the Commonwealth Bank of Australia's $20 billion property platform after the bank's decision to exit the management of its three listed trusts and wholesale retail property fund. The Commonwealth Bank yesterday confirmed it had proposed to internalise the management of the three listed property trusts -- the $8.6bn owner of Chadstone shopping centre and Chatswood Chase CFS Retail, the $4bn office landlord Commonwealth Office Property Fund (CPA) and the $3bn Kiwi Income Property Fund, which owns New Zealand retail and office properties. For CFS Retail, the proposal also includes it acquiring the $4bn wholesale property funds management business and the retail property management and development business owned by CBA. The three REITs are managed by Colonial First State Global Asset Management. GRAPHIC: Value of assets owned by the titans CBA owns a 7.8 per cent stake in CFS Retail worth about $430 million and 6.2 per cent in CPA of about $150m. Its decision to sell the management rights to the trusts is said to be driven by its need to free up capital to comply with new global banking legislation, known as Basel III. The independent directors of the trusts are expected to field market bids, with CPA likely to be the sweet spot for companies like Dexus, GPT, Investa and Mirvac. But analysts said that a play for the platform or even CFS Retail was unlikely due to the businesses being too large for another company to swallow. But there is speculation Lend Lease could bid for the entire platform if it rolled parts of it into a series of unlisted funds with the aid of foreign investors, including the Canada Pension Plan Investment Board. CPPIB has a relationship with Lend Lease and is a key investor in one of the main wholesale funds alongside the Future Fund. Lend Lease declined to comment. Analysts say a potential sale of the management rights, worth an estimated $650m, for the entire platform could be on the cards. Charter Hall's name has been suggested as a potential buyer; however, several analysts said such a deal would not fit the Charter Hall model, nor could it afford such an acquisition. Charter Hall has a close relationship with the wealthy Gandel family, which is a key shareholder in CFS Retail, with a 15.5 per cent stake, and the Charter Hall headstock, where it has a 17.6 per cent stake. JPMorgan last month tipped Charter Hall as a potential buyer of the management rights. Separately, analysts said CFS Retail would need a big capital raising to purchase the management rights for the wholesale property funds management business from CBA. But they believe the raising would be accepted by the market as the purchase would boost CFS's earnings. CFS Retail's second-largest shareholder, industry superannuation fund UniSuper, which holds a 7.2 per cent stake, said the fund was relaxed about the proposal. If Colonial wants too much money to relinquish their rights then it won't be in the best interest of unitholders. But if they want a reasonable price then it could well be in the interest of unitholders," UniSuper head of property and private markets Kent Robbins said. We would also welcome an alternative proposal. Several analysts said Commonwealth Property Office Fund would be in play as a capital raising by the fund to purchase its share of the management rights could receive a frosty response from the market. Maxim Asset Management managing director Winston Sammut said several parties were likely to vie for the management rights to the $20bn platform. "Any company looking to expand their funds management business would be looking to purchase the management rights," he said. "The second step is, of course, an offer for the entire businesses, but that could be further down the track," he added. Mr Sammut said several deals could result from CBA's decision to exit its platform but that CBA would have made its proposal confident of success. He said the businesses were sound and CBA's sale was a result of the amount of capital the bank must set aside under Basel III to shield its funds management arm. CPA closed up 4.5c at $1.13, CFS Retail up 5.5c at $1.98 and Kiwi Income Property up 0.5c at $1.13.