centro secures 714m sale of 29 centres...

Source: www.costar.com

Centro Secures $714M Sale of 29 U.S. Shopping Centers
Written by Sasha M Pardy
July 16, 2008

Debt-Laden Austrialian Retail Landlord Releases Partial Interest to Un-Named Private Investment Group
Centro Properties Group said yesterday that it found a buyer for its 46.65% interest in 29 of the 31 shopping centers it holds in the Centro America Fund ("CAF"), a wholesale fund managed by Centro. The debt-troubled retail property owner did not identify the buyer, a private real estate investment advisor (pension fund).

The contract price for the partial ownership share of the 29 centers, totaling 5.1 million square feet, is $714 million, or approximately $140 per square foot. The transaction is scheduled to close in late September or early October 2008.

Centro said the $714 million represents a 10% discount to previous book value. The entire portfolio was said to be valued at $973.35 million last February and $1.17 billion last September.

The portfolio spans 15 states and the deal does not include CAF's ownership of the 1 million-square-foot Independence Mall in Wilmington, NC and the Elk Park Center, a Target-anchored community center, in Elk River, MN. Centro will continue to provide management and leasing services for the 29 assets for a minimum of one year in exchange for market fees.

“As we have previously advised, the sale of the CAF portfolio is a key step in providing liquidity to our balance sheet,” said Glenn J. Rufrano, Centro’s Chief Executive Officer. To read CoStar's coverage on Centro's highly-publicized debt issues, follow this link.

While this sale is a big success for Centro, especially considering the troubled U.S. capital markets, it unfortunately helps to ease only a small percentage of the retail landlord's issues -- repaying (AU)$2.3 billion to its Australian lenders, $450 million to its U.S. private placement noteholders, and $1.1 billion owed to U.S. lenders related to its joint venture with Centro Retail Trust, by Dec. 15, 2008. Analysts estimate Centro's proceeds from this $714 million transaction will end up in the $250 million to $300 million range because of the fund's debt and complex ownership structure. More impactful will be its pending $1.1 billion sale of four Australian malls.

Centro told Costar the following shopping centers were involved in the sale.

Please click HERE to view those properties!


Ends.

Cheers, Pie :)