centro under fire

Centro under fire over tenants' complaints

Timing is everything in life I wonder what Investor services will do in response to this and another negative article in the Australian for today. Two negatives in 1 day Bridget must have missed the boat of getting in.

Cheers
Hotlegs
I only hold CER

Print Bridget Carter | August 13, 2009
Article from: The Australian
CENTRO Properties Group has been forced to field questions from its joint venture partners and retailers about its capability as a shopping centre manager after reports that the landlord is refusing to carry out basic repairs.

Melbourne-based Salta Properties, which owns a centre jointly with Centro, has pressed the operator about its new management team and its ability to run the shopping centre in Melbourne.

There has also been market speculation that Bob Ell's Leda Holdings has some concerns about how its Centro joint venture centres were being managed, although a company spokesperson would not comment on the claims.

This week, Centro retailers from around the country have told The Australian of toilets that have not been fixed for 18 months in a Centro mall, tenants packing up and fleeing malls at night without paying rent and questionable choices of new tenants.

One retailer, who declined to be named, said ad-hoc leasing deals were being struck by inexperienced staff who had risen quickly after more than 100 Centro employees left in the months after the company's near-collapse 18 months ago.

Of the more experienced staff, New Yorker Glenn Rufrano was among those internally promoted in that time, taking on the role of chief executive in the weeks after former company head Andrew Scott departed. He negotiated a debt-for-equity deal with Centro's financiers to repay more than $4billion in borrowings.

Mr Rufrano announced this month he was leaving the company, as did Centro Australia chief Tony Clarke.

Salta owns Melbourne's Victoria Gardens with Centro, while Leda Holdings co-owns Centro's Hervey Bay mall in Queensland and the Centro Tuggeranong Hyperdome centre in Canberra.

Salta managing director Sam Tarascio said his company had asked Centro about how the change in staffing at the shopping centre owner would affect the property's management.

"We want to know who will be the people in charge of running the shopping centres, and to make sure they have got the appropriate experience," Mr Tarascio said.

"Clearly, once you get a large exodus of experienced people from Graeme Terry (the former leasing director who departed in March) all the way down the ranks, you want to know who it is they are bringing in to replace that expertise. We have asked that question, but at this stage that is all we have done."

Mr Tarascio said the company would want to review the situation if one of the service providers of its properties was not doing its job properly. Among the parties to have left Centro are regional leasing managers, who reported to Mr Terry and who would deal directly with the retailers.

Regional leasing managers Nicole Austin, Joe Haines and Ramsey Fodder were some of those who left. Mr Fodder, the NSW regional head, was replaced by experienced Centro Bankstown manager Belinda Erington.

In December 2007, Centro's securities crashed from highs of about $9 when it announced it was unable to refinance billions of dollars worth of debt, and as chief executive Mr Scott left.

Mr Rufrano, who announced last week he would not renew his contract when it expired in February, said yesterday he had previously revealed that up to 15per cent of the Australian staff were lost between December 2007 and May last year.