Kirsten Webb
Partner •
Sydney
The ACCC's new mandatory merger regime and property and real estate transactions: new Treasury determination
9 minutes
Since we last examined the new mandatory and suspensory merger regime and how it applies to real estate transactions, the Treasury has published the final Competition and Consumer (Notification of Acquisitions) Determination 2025 which amongst other things sets out some welcome exemptions for certain property transactions. The ACCC has also provided further guidance on approaching the information requirements in notifications of acquisitions of leasehold interests during the transition period, and how to consider the relevant market for land acquisitions (including leases).
To recap: from 1 January 2026, the new mandatory and suspensory regime will require acquisitions of shares or assets, including real estate acquisitions, that meet the notification thresholds to be notified to the ACCC and will prohibit the parties from taking steps to complete such acquisitions without first obtaining ACCC approval. These requirements will apply in addition to Australia's foreign investment regime.
The Determination confirms that the following real estate acquisitions will be exempt from these requirements:
Land acquisitions: Land acquired for the purpose of developing residential premises or for carrying on a business primarily engaged in buying, selling, leasing or developing land, other than a purpose relating to operating a commercial business on the land;
Acquisitions of entities with interests in land: Acquisitions of an entity where the (acquired) entity's only non-cash asset is a legal or equitable interest in land (including a share); and
Lease extensions and renewals, development rights and lease backs: Acquisitions of lease extensions and renewals, subsequent acquisitions of the same interests in land, land development rights and sale and lease back arrangements.
The elements necessary to satisfy these exemptions are detailed (see below), so parties planning or negotiating acquisitions of Australian real estate where the acquisition meets the notification thresholds and will close after 31 December 2025 should now consider:
which property transactions may need notification;
which exemptions may apply;
when the acquisition should be notified;
how long it will take to notify and wait for ACCC approval; and
whether a notification waiver could be secured (the earliest waivers are available is 1 January 2026).
Which property transactions will be affected?
The monetary notification thresholds turn on the Australian revenue of the parties and the Australian revenue attributed to the target assets, or the target asset's market value, or the transaction value.
The table below sets out how the monetary notification thresholds apply to real estate assets.
In calculating Australian revenue for the purposes of a real estate transaction, the relevant revenue:
of the "purchaser" includes the revenue of their wider corporate group; and
in the case of the "target assets", will be the gross revenue (determined in accordance with accounting standards) for the most recently ended 12-month financial reporting period, that is attributable to that real estate and any other assets being acquired, not the total gross revenue of the vendor group.
Set out below are some examples of real estate transactions likely to require notification where a monetary notification threshold is satisfied.
What property transactions are exempt from notification?
Exceptions from the Notification Obligation apply to the legal or equitable acquisition of land, or a specific interest in land. There are three categories of exemptions.
Further guidance from the ACCC on leases and agreements for lease in the transition period
The transition period from 1 July to 31 December 2025 leading up to the commencement of the new mandatory and suspensory regime is well underway and we are getting closer to 1 October 2025, which is the indicative practical deadline for clearance requests under the current informal regime. Parties are increasingly considering how to deal with transactions that are being signed now, but which may close after 31 December 2025 and be subject to the new mandatory and suspensory requirements.
In FAQs published on 15 August 2025, the ACCC stated that it understands that some businesses are currently considering whether to voluntarily notify leases or a corresponding agreement for lease that meet the notification thresholds prior to 1 January 2026, to obtain commercial certainty. Those businesses are encouraged to engage with the ACCC prior to lodging their notification, particularly during the transition period before the notification waiver process becomes available. This will enable the ACCC to discuss how certain questions in the notification form should be answered in relation to acquisitions involving leasehold interests and also whether certain information may not be required in the form given the circumstances of the lease.
To date, the first two acquisitions notified to the ACCC under the new formal regime are lease deals:
Kongsberg Defence Australia's proposal to enter into lease arrangements with Greater Newcastle Aerotropolis Pty Ltd for land adjacent to Newcastle Airport, to establish a missile manufacturing and maintenance facility in Newcastle, NSW (notified on 8 August 2025);
Asahi's entry into an AFL with GPT under which GPT will construct a warehouse at Deer Park, Victoria, which it will then lease to Asahi for use in its logistics operations for the storage and distribution of both alcoholic and non-alcoholic products (notified on 15 August 2025).
How to complete notification form market requirements for land acquisitions (including leases)
The new mandatory and suspensory regime includes mandatory notification forms, which include requirements to address relevant markets. The ACCC guidance referred to above also clarified that relevant market to focus on in a notification form for land acquisitions (including leases) where the site is to be used for a head office or warehouse is the downstream markets related to the intended use of the site. This is because the site is regarded as an "input" to that downstream market. For example, if the site is proposed to be used for manufacturing widget X, then the notifying party should provide details about the market for the supply of widget X.
Real estate transactions in "designated" sectors
The ACCC has for many years taken the view that the acquisition of a legal or equitable interest in land can raise competition concerns and should be reviewed by the ACCC, for example, in the context of supermarket leases and greenfields sites.
The Determination reflected this view and sets out additional notification requirements for the acquisition of supermarket businesses by the major supermarkets (Coles, Woolworths and each of their connected entities), even if the above monetary notification thresholds are not met.
This includes any acquisition of a legal or equitable interest in land provided that the land meets one of the following size requirements:
for land with a commercial building upon it, the gross lettable area of the building is greater than 1,000 square metres (previously 700 sqm in the draft determination);
for land that does not have a commercial building upon it, the land is greater than 2,000 square metres (previously 1,400 sqm in the draft determination).
If a supermarket is acquiring land directly adjacent to land that it already owns, the area is to be calculated as if the two parcels were a single parcel of land.
The designation for major supermarkets is currently in effect for the next five years (and capable of being renewed). Other sectors that have been flagged for possible future designation are fuel, liquor and oncology‑radiology.
Key takeaways
If you are involved in real estate transactions, you should:
For any transactions that are unlikely to close before 31 December 2025, consider whether they meet the monetary notification thresholds and, if so, whether any exemptions will apply, or whether you should notify those transactions during the transition period.
For all real estate transactions after 31 December 2025, seek competition and property advice on the applicability of the new regime to your transaction and, if so, the best way to navigate the ACCC filing process, including:
additional questions that may be required during preliminary due diligence;
whether the revenue of the parties or their wider group would meet the monetary notification thresholds outlined above; and
consider the anticipated timelines for major transactions.
Applicable monetary notification threshold
Example of real estate transaction requiring notification
1. Combined Australian revenue of A$200m – Any acquisition of real estate/assets if the combined Australian revenue of the purchaser (eg. the corporate group of the purchaser or tenant) and the target assets (eg. the corporate group of the vendor or landlord, to the extent attributable to the sale assets) is A$200 million or more,
AND
(a) the target assets have attributable Australian revenue of A$50 million or more or, if it is not reasonably practicable to attribute Australian revenue to the target assets, 20% of the target asset's market value
OR
(b) the global transaction value is A$250 million or more.
Eg 1. An agreement for lease (AFL) is acquired over a vacant block of undeveloped greenfield land which does not earn any revenue. The land is valued at A$300m. The acquirer of the AFL is a company that operates retail businesses and develops land for the business and other purposes. The acquirer and the lessor both have revenues greater than A$200m. For the purposes of the thresholds, the target asset's market value is 20% of $300m ie. A$60m and a notification is required.
Eg 1: a business operating pubs and restaurants around Australia with annual Australian revenue of A$611 million seeking to acquire a restaurant and bar complex with turnover of more than A$10 million per annum.
Eg 2: An e-commerce company with annual Australian revenue of A$3.8 billion seeking to acquire a large distribution warehouse complex from an institutional landlord with annual revenue of A$750 million, A$12 million of which is attributable to the warehouse complex being acquired.
2. Very Large Purchasers – Any acquisition of real estate/assets by a purchaser with Australian revenue more than A$500 million where the target assets have attributable Australian revenue of A$10 million or more or, if it is not reasonably practicable to attribute Australian revenue to the target assets, 20% of the target asset's market value.
Eg 1: a business operating pubs and restaurants around Australia with annual Australian revenue of A$611 million seeking to acquire a restaurant and bar complex with turnover of more than A$10 million per annum.
Eg 2: An e-commerce company with annual Australian revenue of A$3.8 billion seeking to acquire a large distribution warehouse complex from an institutional landlord with annual revenue of A$750 million, A$12 million of which is attributable to the warehouse complex being acquired.
3. Three Year Combination of Purchases – All unnotified acquisitions of real estate/assets with attributable Australian revenue of more than A$2 million (as at the date of the previous transaction) where in the past three years:
the buyer has made other purchases of shares or assets which relate, directly or indirectly to the carrying on of a business that predominantly involves the supply of the same or substitutable goods or services; and
if treated as a single acquisition, the cumulative Australian revenue attributable to those acquisitions over a three-year period is at least:
(a) A$50 million, in the case where the combined revenue of the purchaser and attributable to the target assets is above A$200 million; OR
(b) A$10 million, in the case where purchaser has Australian revenue more than A$500 million.
[Note that for this three-year lookback test, any previous small acquisitions (ie. buying a business or assets with turnover of under $2 million) are disregarded in the three year cumulative Australian turnover test.]
Eg 1: a business operating pubs and restaurants around Australia with annual Australian revenue of A$611 million seeking to acquire a number of pubs and restaurants over a three-year period with cumulative revenue of A$10 million.
Exemptions
Examples
Land acquired for any of the following purposes:
developing residential premises;
carrying on a business primarily engaged in buying, selling, leasing or developing land (including activities that are ancillary or incidental to that primary purpose) other than a purpose relating to operating a commercial business on the land.
Eg 1: an institutional landlord seeking to acquire an office building for the purpose of carrying on the business of leasing the premises in the building, would be exempt. The acquisition of the lease for the premises by an intending tenant would not be exempt and would require notification if the relevant thresholds are met.
Eg 2: a property developer seeking to acquire vacant land for the purpose of constructing residential apartments for sale or lease, would be exempt. If the developer also intended to acquire or establish supporting property management services, concierge services or similar activities in relation to the development of the residential apartments, these purposes are an ancillary or incidental commercial activity and would still fall within the exemption.
Land entities: Where either of the above purposes apply, and the (acquired) entity's only non-cash asset is a legal or equitable interest in land (including a share).
Eg 1: the acquisition of 100% of shares in an entity that owns land, carries on the business of leasing that land to tenants (and ancillary activities) and does not otherwise carry on a commercial business on the land.
Acquisition of specific interests in land
Lease extensions and renewals: an interest in land which is an extension or renewal of a lease for land upon which a commercial business is currently being operated (whether as a legal or equitable interest). The exemption does not apply where the renewal or extension involves a new or expanded parcel of land.
Subsequent acquisitions of the same interests in land: any subsequent interest(s) acquired in relation to a previous interest in the land which was notified to the ACCC, provided the acquirer and ownership proportion is the same as between the subsequent and previous interest, and the size of the land is materially the same.
Land development rights: interest(s) in land in the form of land development rights, and if those land development rights were an equitable interest in land, the acquisition would be covered another of the property exemptions in this article. Examples of land development rights include the right to develop, redevelop, construct, refurbish, expand and/or subdivide land or buildings which may arise under planning or rezoning schemes, development agreements or similar instruments.
Sale and leaseback arrangements: sale or leaseback arrangements relating to land (whether as a legal or equitable interest).
Lease extensions and renewals:
Eg 1: an existing tenant with Australian revenue of $1.2 billion who exercises an option renew its lease for a further term of one year for an annual rent of $11 million would be exempt from notification.
Eg 2: 10 months later, that same tenant wishes to extend its occupation of the same commercial building upon the expiry of the lease. Under those circumstances, the tenant would be exempt from notifying any subsequent new lease, variation of lease or similar instrument. A surrender and regrant of the lease would also be exempt.
Subsequent acquisitions of the same interests in land:
Eg 1: a purchaser enters into a contract for sale of land acquiring an equitable interest in the land which is notified to the ACCC. If the purchaser subsequently completes the purchase acquiring a legal interest in the same land, the exemption will apply to the second acquisition.
Eg 2: a tenant occupies a premises under an unregistered lease that requires registration and therefore holds an equitable interest in the premises. If the tenant notifies the ACCC of the acquisition of the equitable interest and then subsequently registers that lease acquiring a legal interest in the premises, the exemption will apply to the second acquisition.
If the proportion of ownership materially changes, for example, the purchaser notifies the ACCC of an equitable interest in the land as to 20%, as tenants in common, and the legal interest subsequently acquired increases to 50%, then the exemption will not be available.
Sale and leaseback arrangements:
Eg 1: a manufacturer sells the land on which its factory is located and leases the property back from completion in order to continue operating on the site
Get in touch
Mihkel Wilding
Partner •
Sydney
Shameela Karunakaran
Special Counsel •
Sydney
Anchal Kapur
Senior Associate •
Sydney
Philipa Thomson
Special Counsel •
Sydney
Disclaimer
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.