Australia's largest bank by market value, the Commonwealth Bank of Australia is planning to internalise its real-estate investment trusts and is offering to sell the management rights to the trusts.

The bank said that it has made a indicative, non-binding proposals for internalising management of Commonwealth Property Office Fund valued at $2.5 billion and the CFS Retail Property Trust Group worth $5.7 billion. The proposal for CFS Retail includes the acquisition of wholesale property funds management business and the integrated retail property management and development business by CFS Retail from CBA.

The funds, which are managed by Commonwealth Managed Investments Limited, have said that they are considering the proposal by the CBA. The board of CMIL said in a statement to the Australian Securities Exchange that the proposals are highly conditional, indicative and incomplete.

The board has set up a sub-committee of independent directors for considering the proposal but indicated that it is not sure if the plans will be accepted. The acquisition will be subject to an approval of CFX and CPA unit holders.

The Commonwealth Bank also said that it has made a similar offer to the Kiwi Income Property Trust, which has said that it is considering the offer.