Centro facing jump in shopping centre vacancies Bridget Carter | August 20, 2009 Article from: The Australian
CENTRO'S full-year result next week is expected to reveal vacancy rates at its 730 shopping centres have shot up and income has fallen, according to market analysts.
The forecasts come after Centro yesterday announced a further reshuffle of its management and board changes.
One analyst, who did not wish to be named, said it was hoped the company's fiscal 2010 guidance would offer clarity on the company's asset sales program.
As foreshadowed in The Australian this week, Centro has sold over $US500 million ($609.7m) worth of centres in the US during the last financial year -- most of which were offloaded from its satellite, Centro Retail Trust.
"We hope to get a feel for their scale of asset sales and the timing of those sales," the analyst said. "That's really the key."
More "clearing of the decks" was expected to be announced with respect to management restructuring as well as asset management.
Centro Properties yesterday announced Joe Haines had returned to Centro as the national leasing manager after previously heading leasing for Centro's MCS property arm, (which Centro purchased in 2003), and after working as the regional leasing manager for Centro.
Centro Retail announced accounting firm partner Michael Humphris and former Coles Group chief financial officer Fraser MacKenzie would be appointed as non-executive directors of the trust.
Current directors Peter Wilkinson, who is the former David Jones chief executive, Graham Goldie, who is the former Myer general manager, and Sam Kavourakis, the former Optus non-executive director, all step down.
The move will mean most of the Centro Retail board will no longer be members of the Centro Properties Group boards.
This is part of the long-term strategy to separate the boards of the two listed Centro trusts.
The shopping centre owner would be reluctant to sell its top performing assets, as that would drive down interest cover, according to analysts.
This week, outgoing chief executive Glenn Rufrano told The Australian there were currently 600 people working for the company.
Many of the 100-plus personnel who left in the weeks after the company almost collapsed had been replaced.
"In that time one staff member could not get a home loan because the banks were nervous they would not have a job," Mr Rufrano said. "We did everything we could to uplift morale."
Many employees had been promoted from within the company to fill positions.
Graham Terry, who departed the company earlier this year, was replaced by Mark Wilson as the general manager of property operations. He previously reported to Mr Terry.
Michael Benett has taken over from Philippa Kelly as the head of funds management, after previously working as a fund manager for the group, and John Hutchinson has departed as general counsel and has been replaced by Dimitri Kiricoulacos, who was hired externally.
Chris Nunn, formerly with ISPT, was also joining the company as the group's chief financial officer.
Meanwhile, analysts at investment bank JPMorgan are anticipating Centro Retail Trust's security price will almost double in the next 12 months.
Rob Stanton, Richard Jones and Michael Scott have placed a neutral rating on the stock and anticipate a target security price of 25c for June 2010.
A factor for the rating is the improvement in spending patterns of US consumers.
Also playing their parts are the relief in credit markets and the improvement in exchange rates between Australia and the US. Centro Retail has $1.6billion of equity versus $9.3bn worth of debt on a look-through basis.
Ends.
Cheers, Pie (:
CNP Price at posting:
17.5¢ Sentiment: None Disclosure: Held
