Buyers eye Centro sale

Carolyn Cummins April 14, 2012

BUYERS are said to be lining up already to buy half-shares in key Centro Retail Australia assets that, if sold, would reap the shopping centre owner close to $665 million.

The group, which has been created from the debris of the former debt-laden Centro Properties, yesterday put up for sale a 50 per cent stake in the Glen in Melbourne, the Galleria in Perth and Colonnades in Adelaide. These three assets, which have a combined value of $1.33 billion (100 per cent) and represent about 30 per cent of Centro's asset base, have long been identified as the jewels in the Centro crown.

Centro Retail was established in late 2011 after a restructure of the debt-laden Centro Group, and has $6.9 billion worth of investments in 91 shopping centres. Although it's 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 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.

Brokers at JP Morgan said a sell-down of 50 per cent stakes in all three would realise $665 million if sold at book value.

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