How it was reported good to see Divi still confirmed. One would expect as we get closer to that the SP should improve. Good to see the board and review team take on some of Defabs suggestions if they could just track him down and offer him a job we would all feel a bit better.
Cheers Hotlegs
Centro Retail puts core assets on the block
Carolyn Cummins April 13, 2012 - 12:38PM Read later
Amid the court case over its financial accounts and disclosure, Centro Retail Australia has put up for sale a half share in three of its core assets as part of its strategy to repay debt and streamline the business.
These three assets have a combined value of $1.33 billion and represent about 30 per cent of Centro's asset base. The potential assets sales were flagged in February by the new chief executive Steven Sewell and will include a 50 per cent stake in the Galleria in Perth, The Glen in Melbourne and Colonnades in Adelaide.
These shopping centres, which are being sold by Simon Rooney, the Australian Head of Retail Investments for Jones Lang LaSalle, have long been identified as the jewels in the Centro crown. The sales are tipped to draw interest from overseas and local investors.
"The Centro capital partner strategy is an ongoing example of large Australian real estate investment trusts (A -REIT's) recycling capital and retaining management by selling down part or whole shares in core regional assets at book value or a premium to book value," Mr Rooney said.
Brokers at JPMorgan said a sell down of 50 per cent stakes in all three would realise $665 million if sold at book value, which the analysts think is realistic as demand for prime retail assets is strong, and are unlikely to sell unless at least book value is achieved.
"The sale will prove up centro's net tangible asset value by selling its best assets, which will materially improving its balance sheet and liquidity position plus has the added benefit of being accretive to earnings," JPMorgan's analysts said.
Although it is only a half share, private retail owners such as Gandel Group would be one keen party, as would the listed trusts of CFS Retail and possibly Mr Sewell's former employer Charter Hall Retail REIT.
These centres are highly attractive as they are the biggest in their population catchments and have a good exposure to food and supermarkets, which are currently the more profitable tenants in typical shopping malls.
In a statement today, Mr Sewell said the asset divestments "heralds an important step in the evolution of the group, as it takes its place as a major A-REIT 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," Mr Sewell said.
"Importantly, we confirm that the group's forecast for the 2012 financial year unchanged and it is expected that Centro Retail Australia will deliver on its 2012 financial year earning and distribution guidance of 6.4 cents a security as set out in the Disclosure Documents."
CRF Price at posting:
$1.83 Sentiment: LT Buy Disclosure: Held
