article rumour upcomimng asset sale

October 18, 2010
INVESTORS in the beleaguered retail landlord Centro Properties could soon see some returns as the group closes in on the sale of a $2 billion asset portfolio.
The anticipated deal coincides with the revival of the real estate investment trust sector.
Property analysts said a sale by Centro would most likely include about 10 key properties that are owned outright by Centro and its associated Centro Retail Trust.

Property sources indicated that after three years of waiting, Centro would look to sell the $2 billion portfolio, allowing investors to finally recoup some equity. This news follows the recent attempt by the retail landlord to sell a stake in its MCS management business.
Likely buyers include Lend Lease for the lot, while Stockland, Charter Hall Retail Fund, GPT Group and CFS Retail Fund, which recently bought four Direct Factory Outlets, are interested in separate assets.
However, with another debt deadline looming in December, it is unlikely that Centro's bankers will accept a partial sale of assets. Their preference is for the sale of the portfolio in one deal, leaving the buyers to then sell any properties they do not want.
The combined debt in the group is about $16.5 billion and there is $275 million worth of loans maturing in December this year. Up to $10 billion is due to be refinanced by December next year.
A spokesman for Centro said the directors were very focused on restructuring the business. This included fighting a $500 million class action from investors in the first half of next year.
Analysts said a portfolio sale could include its flagship, The Glen shopping centre in Melbourne's south-east, in which Centro's corporate head office is located, and the Centro Galleria in Western Australia, worth $293 million.
GPT ran the ruler over the Centro Galleria last year but at the time the asset was bundled in with some of Centro's US malls, which made the deal unattractive. Centro Bankstown, which is valued at $290 million, is also likely to be included in the portfolio sale.
Of the 28 centres, Centro jointly owns 25 with Centro Retail Trust and in some cases its unlisted Diversified Property Fund. Three are half-owned by private investors.
Centro's new chief executive, Robert Tsenin, has made it clear his primary task is to simplify Centro's ownership structure by de-coupling the syndicates and Centro Retail Trust into independently owned and managed businesses.
Centro and the retail trust have engaged their own advisers to work on the separation