Real Estate Equities: Buy Back and Capital Raising Scenarios

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Introduction
Real Estate Equities are among the best traded and marketable securities in the world.
Private real estate equity allows the HNWI and other institutions to invest in debt holdings
and equity in property assets. Institutions like pension funds and endowments are the most
likely to invest in real estate property equity. Using the active management strategy and
model, private equity real estate takes a diversified property ownership approach (Anule, et
al, 2018). Ownership models and strategies can range from raw land developments and
holdings to redevelopment of existing properties or cash flow injections into properties that
are struggling. The assessment of Task 1 and Task 3 of various reals estate equities and
development will be used in analyzing the on market buy back on proceeds.
Scenario #1:
GPT sells its 50% stake in Westfield Penrith ($733.0m) and uses these proceeds to
conduct an on-market buy-back ($500m) with the balance ($233.0) paying down debt.
GPT uses proceeds from the sale of its 50% stake in Westfield Penrith ($733.0m) and uses its
proceeds in conducting a buy back and a loan repayment program of $ 500 m and $ 233 m
respectively.
Activity Amount($) Amount($)
Sale of Westfield (50%
Stake )
$733 m
Proceeds –market buy- $500 m

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out
Loan repayment $ 233 m
Total proceeds GPT $ 733 m
Share buyback or buy-back, - this is the process of buying your own shares by the issuing
corporation.
There are several reasons for the official buy-back for GPT
For example, after the collapse of the securities market, leading corporations held a series of
buy-backs totaling $ 500 m. After the tragic events, the repurchase of securities was legally
relaxed to support the financial condition of exchanges (Clements, Tidwell, and Jin, 2017).
The new rules made it possible to freely register the buyback intention and remotely inform
the national commission about the buyback.
Dividend aspect
In many places, property equity dividends are taxed more than income from exchange rate
appreciation of stocks. Ultimately, large institutional investors are not interested in earning
income through dividends. Buybacks of securities on the free market cited evidence that for
this reason stock repurchases can be used as a legal way to save on taxation. By paying large
amounts as dividends, GPT significantly reduce their net worth (Devaney, and Xiao, 2017).
In the GPT, the repurchase of own shares is made with the aim of organizational reform and
reduction of the authorized capital. It happens only after a full meeting of shareholders. The
legislation of the buy backs allows redeeming shares of minority shareholders at a price
clearly set by the issuer. Most often the buyback procedure is launched by property

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companies engaged in the export of oil, gas and precious metals. Excess cash exposes such
companies to excessive inflationary risks.
Real examples of stock buy backs
Stock repurchase is a form of investment that allows issuers with very low risks to invest in
their own business. According to a study conducted the property industry was the most
attractive spectrum of the economy for repurchases in the coming years.
Periodically, the stock market repurchases its own shares by the issuer. Why is this done and
what are the real reasons for these actions of companies on the exchange? Just like that, no
one will buy back their assets. Companies pursue some of their goals, which in turn should
bring them certain benefits. But what about ordinary private investors? What should they do
when the buyback is announced on the exchange? Sell, buy or stay away? Is it possible to
make money on it and what steps should be taken if information about the buyback has
appeared?
By purchasing GPT shares in the secondary market, the property company pursue their
interests first of all and increase investor confidence in it, which in most cases has a positive
effect on the further growth of quotations (Hogan, 2016). Consider the main reasons for the
repurchase in order to understand how the situation on the exchange may develop in the
future.
Quotes fall