[SYDNEY] A bidding war for Australia's Commonwealth Property Office Fund escalated after Dexus Property Group and the Canada Pension Plan Investment Board hiked their joint offer - a move expected to prompt a higher bid from a rival suitor.

The latest cash and stock offer values CPA, as the fund is known, at A$3 billion (S$3.42 billion) and represents a 2.6 per cent premium over a bid from rival property investor GPT Group, Dexus said.

The value of both bids fluctuate according to the share price moves of Dexus and GPT.