Australand has rejected a $3 billion offer from fellow property company GPT Group for two thirds of its business, and says it will not enter negotiations with the bidder.
GPT last week made an indicative offer for Australand's investment property portfolio and its commercial and industrial property business, for $140 million more than their current value.
Australand's assets are valued at about $2.8 billion.
Australand, which also owns residential properties, said on Friday the offer was too low.
"The board of Australand, together with its advisers, has carefully considered the proposal and has determined that the proposal does not provide a compelling value proposition and is not in the best interests of Australand's securityholders," the company said in a statement.
The GPT offer does not provide a sufficient premium or compensation to securityholders for the transaction costs that would be incurred by Australand, it said.
"Whilst the board remains committed to maximising securityholder value, it does not intend to engage with The GPT Group in relation to the proposal," the company said.
Australand shares were up seven cents, or 2.2 per cent, at $3.27 at 1348 AEDT, while GPT shares were down three cents at $3.57.