This article is from the Australian Property Journal archive
CENTRO Retail Australia is offering to sell a 50% stake in its best shopping centres, the Galleria in Perth, Colonnades in Adelaide and the Glen in Melbourne, valued in excess of $665 million.
The 100% interest in three assets has a combined total book value of more than $1.3 billion.
The latest announcement follows Centro’s previous plan to sell up to $1.5 billion worth of smaller retail properties.
CRF’s CEO Steven Sewell announced this new strategic initiative to sell a half stake in the three centres will unlock capital whilst maintaining ownership and management of the trust’s three best assets.
“The announcement heralds an important step in the evolution of the group, as it takes its place as a major AREIT sector participant.
“The decision approved by the board to pursue a strategic alliance on a selected number of our existing higher value shopping centres, using the capital realised to unlock the substantial latent redevelopment upside that exists in the portfolio, is an exciting strategic initiative,” he added.
Sewell said money raised from the sale will be used to further reduce gearing.
CRF has appointed renowned expert Jones Lang LaSalle’s head of retail investments Simon Rooney to market the three properties, who said this will be the largest retail property portfolio sale since the DFO sale in 2010, which he negotiated.
Rooney expects these properties will be highly sought both domestically and from offshore.
He added that retail transaction volumes totaled $3.2 billion in 2011 with a further $537.8 million recorded so far in 2012. The Myer Centre Brisbane 50% sale at $366 million is the largest retail transaction since Lend Lease’s APPF Retail acquired a 50% interest in Cairns Central ($261 million) from Westfield Group in October 2011. It is also the largest retail agency transaction since the 50% sale of Northland Shopping Centre ($455 million) to the Canada Pension Plan Investment Board in May 2011.
“As a result of this continuing demand, we expect keen interest in this current Centro sale process and other major owners will pursue this strategy of ‘capital recycling’ in order to fund expansions, refurbishments and/or to retire debt,” he continued.
The most expensive offering is the Galleria, located 8km north-east of Perth, valued at $620.3 million (50%: $310.15 million). The two-level centre comprises 69,368 sqm of GLA and 4,065 car parking spaces. It is anchored by Myer, Target, Kmart, Woolworth, Coles, Greater Union and 200 specialty retailers, and boasts a moving annual turnover of $475 million.
The second dearest asset is Colonnades, located 35km south of Adelaide, worth $412.7 million (50%: $206.35 million). The two-level centre comprises 59,179 sqm of space and 3,138 car parking spaces and is anchored by Myer, Coles, Woolworths, Big W, Kmart and 180 specialty retailers with a MAT of $330 million. The property was constructed in 1979 and underwent a major redevelopment in 2006.
Finally the Glen, located 20km south-east of Melbourne is valued at $298.5 million (50%: $149.25 million). The two-level centre with an office tenancy comprises 65,578 sqm of GLA and 3,100 car parking spaces and is anchored by David Jones, Target, Coles, Woolworths, Kmart and 175 specialty retailers with a MAT of $283 million.
Property Review
