Redefine Properties International on Thursday announced that it was increasing its presence in the Australian property market through its 82% held subsidiary, Redefine Australian Investments Ltd (RAIL).

RAIL plans to increase its stake in Cromwell Property Group from the current 19.59% to 22.56% via a call option agreement.

The transaction, valued at A$24.75 million, was expected to be earnings enhancing for linked unit holders in the medium to long term, the property fund said.

"The transaction consolidates RAIL's position as the largest stapled security holder in Cromwell, and ensures RIN can maintain a significant influence on the affairs of Cromwell going forward," the company said.

Based on the current market price of Cromwell stapled securities, the transaction will result in RIN's net asset value increasing by approximately AUD2.1 million.

In terms of the call option agreement, Cromwell may at any time between March 1

2011 and March 2011, call on RAIL to subscribe for 35 million stapled securities. RAIL will pay the subscription amount on 1 March 2011 or a date to be determined by the Cromwell board in its absolute discretion which date shall be no later than 30 June 2011.

RAIL does not have any right to subscribe for the subscription securities unless required to do so by Cromwell.

The transaction is being funded 100% by a loan facility from Investec Bank (Australia) Ltd

Source: I-Net Bridge