This article is from the Australian Property Journal archive
CONTINUED weakness in the United States retail environment has hampered Macquarie DDR Trust.
MDT recorded interim core earnings of $A14.5 million in the six months to December 31 2009 – a fall of 65.3% when compared to the previous first half year result of $A41.8 million.
The trust’s net property income fell 30.1% to $US48.1 million and shopping centre net property income declined 18.3% to $US49.6 million.
The trust made a statutory net loss of $8.7 million, taking into account certain unrealised, non-cash or non-recurring items including asset valuation movements.
But CEO Luke Petherbridge said the US retail environment is showing signs of recovery with leasing activity during the period remaining healthy.
As at December 31 2009, the Trust’s core shopping centre portfolio, consisting of 49 assets covering 11.0 million sqft, was 89% leased and the weighted average lease maturity was 5.1 years. During the period, the trust successfully leased 560,245 sqft, or 5.1% of the portfolio.
The weighted average rental decrease on new leases and renewals was 12.7%. Although rental rates on new leases are at lower levels than that paid by prior tenants.
The ex-Mervyns portfolio consists of 31 assets comprising 2.4 million sqft and remains 6.4% leased at December 31 2009.
Meanwhile asset revaluations resulted in a 1.6% decrease in portfolio value to $US1.43 billion, down from $US1.45 billion as at June 30 2009. The movement in portfolio value is the result of a softening of the weighted average capitalisation rate from 8.6% to 8.9%.
Petherbridge said MDT has started discussions with the CMBS special servicer for the $US145.1 million loan maturing on April 05 2010 seeking to extend this facility in advance of its maturity date.
“Despite relatively solid operational performance, the trust still faces significant challenges due to its capital and funding positions.
“We will continue to work on improving our position, and management remains in discussions with several of its counterparties and lenders to restructure their covenants and extend maturity dates of near-term debt facilities,” Petherbridge said.
Australian Property Journal
