UPDATE 1-Australia's Valad to announce strategic alliance

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SYDNEY, Feb 4 (Reuters) - Australian property firm Valad Property Group (VPG.AX: Quote, Profile, Research) said on Monday it may announce a strategic alliance, and requested a halt to the trading of its shares.

Valad said the proposed terms of the alliance will not involve an offer for the company, but may involve an issue of securities by Valad.

It said it expects to make an announcement before the start of trading on Tuesday. Valad shares rose as much as 14 percent on Friday on speculation it could be a takeover target.

Its share price had slumped in the fallout across the property sector from the near-collapse of shopping mall owner Centro Properties Group (CNP.AX: Quote, Profile, Research), whose shares dived 80 percent after it said it was having trouble extending a tight refinancing deadline for A$3.9 billion (A$3.5 billion) in debt.

Analysts have said that Australia's property sector is ripe for consolidation as investors shy away given the troubles several companies have faced and the possibility of falling property prices.

As well as mergers between domestic firms, some analysts expect a trend of overseas sovereign funds taking stakes in Australian property to pick up.

Valad shares closed at A$1.22 on Friday, down from around A$1.60 before Centro's announcement in mid-December.

Valad said in December it had refinanced A$235 million of short-term debt due by the end of December, and it has another A$374 million of debt due by June 30.

Last June, Valad extended its portfolio reach into Europe with the A$2 billion acquisition of UK real estate firm Scarborough. ($1=A$1.10) (Reporting by Victoria Thieberger; editing by Jonathan Standing)