Shares of Brookfield Property Partners LP (BPY) have been weak to concerns about a soft 3Q2018 and investors shying away due to concerns about the high leverage, extermal management, rising interest rates and pessimism about propects for the Retail (GGP) portion of the business.
Brookfield Asset Management (BAM) is likely to take advantage of this dip in BPY and could increase its ownership stake in BPY from 53% to 60% or more over the course of next few months.
It is yet to be seen if BAM 's plan for re positioning and redevelopment of GGP assets will be successful or not. There is also some risk in terms of whether BAM and BPY can sell select GGP assets at good valuation over next 12 to 24 months to deleverage the balance sheet as planned.
BAM will need to execute flawlessly over next year to strengthen BPY balance sheet. Brexit related pessimism (BPY has significant UK assets including 50% ownership in Canary Wharf and assets in Central London) and fear of rising interest rates and BPY having 37% of debt exposed to variable rate mortgages are a factor to consider.
Time will tell but odds are in favor of BAM succeeding in its plans for BPY and realizing unit price of $30 over next 3 years.
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