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On behalf of Federation Centres (FDC) and since mid-2012, Jones Lang LaSalle has now sold more than $1 billion of 50% co-ownership interests in eight major shopping centre assets.
AUSTRALIA, 8 FEBRUARY 2013 – Acting on behalf of Federation Centres, formerly Centro Retail Australia, Simon Rooney of Jones Lang LaSalle has sold $371.4 million of half shares in five retail assets to ISPT, on an average yield of 7.49% and at a premium of 2.9% above book value (pre-transaction costs).
The significance of this sale for the Australian retail investment market:
• The sale is a further example of large A-REITs strategically recycling capital by selling down part or whole shares in core assets at book value or a premium to book value;
• More than $1.0 billion of assets have been sold by Jones Lang LaSalle using this strategy for Federation Centres since mid-2012, following the sale to the Perron Group in May last year for $690.4 million comprising a half share in three major regional shopping centre assets (Galleria in Western Australia, The Glen in Victoria, Colonnades in South Australia);
• With more than $1.0 billion in capital raised from these co-ownership arrangements since mid-2012, FDC are well positioned to grow their business through redevelopment projects across their portfolio and further acquisitions of syndicate properties;
• The timing to execute this strategy is right as current pricing being achieved is at or above book value for large retail assets. The total purchase price of $371.4 million reflects a premium of 2.9%. The purchase in 2012 of $690.4 million in assets by the Perron Group represented a 3.7% premium to book value;
• This move by Federation Centres is further evidence of the dominant retail investment theme in 2012 of large A-REITs recycling capital. Of the $6.3 billion of retail investment transactions in Australia in 2012, approximately half (45%) of these were transacted through A-REITs recycling capital;
• Jones Lang LaSalle has a further $1.5 billion worth of retail property in due diligence to potentially transact before June on behalf of vendors that are employing this approach.
Assets in the sale portfolio to ISPT include:
• NSW - Warriewood (sub-regional centre)
• WA - Mandurah (sub-regional centre) and Halls Head (convenience centre)
• VIC - Karingal and Cranbourne (both sub-regional centres)
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