Larry Schlesinger | 20 January 2013

Centro buys Coffs Harbour mall from syndicate for $65.5 million

The restructuring of the Centro Retail Australia property portfolio continues with the shopping centre landlord announcing that it has acquired the Centro Tormino, about 8 kilometres south of Coffs Harbour for $65.5 million from one of its investment syndicates.

The sale was concluded on December 14 with the price in line with the June 2012 independent valuation of the centre and 8.3% above the highest offer received for the Centre during the most recent March 2012 sale campaign.

It follows Centro selling its Surfers Paradise Mall for $162.5 million to a Challenger institutional investor syndicate.

Centro Tormino formed part of the Centro MCS 16.

The 21,000 square metre mall was acquired for $25 million in September 2006 on a yield of 10.28% with Coles and Woolworths as the anchor tenants and 35 speciality stores.

The syndicate has not made any distributions to investors since July 2008 and its senior debt facility was due to expire in December last year.

In his update to syndicate investors, Gerard Condon, executive general manager of syndicates, said the sale to Centro Retail Australia saved the syndicate approximately $650,000 in sale agents commission.

He also said that any alternative strategies were likely to "take more time to complete and incur further transaction costs with no guarantee of improved value for syndicate investors".

Investors are forecast to receive a final syndicate net asset backing of $0.44 per unit.

According to the Australian Financial Review, Centro is considering purchasing another single-asset fund, MCS 27 which holds the $91 million Sunshine Marketplace in Melbourne, as its debt facility reaches term.

Centro is currently acquiring key syndicate assets and disposing of those it deems non-core as part of its restructure plan agreed with lenders in December 2011, which saved it from collapse.

Other assets it has acquired include the Centro Dianella in Perth and full-ownership of the $570 million Bankstown shopping centre in NSW.

Centro will rebrand to Federation Centres at its EGM today, subject to shareholder approval.


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