Us Shopping Strategy Is Unity For Centro Properties

The Age

Saturday August 25, 2007

Carolyn Cummins, Sydney

CENTRO Properties Group is set to merge its Centro Shopping America Trust with its other listed vehicles as part of the continuing consolidation of its global retail property business.

At the group's profit presentation earlier this month, Centro chief executive Andrew Scott said he was undertaking a strategic review of Centro Shopping America, formerly Galileo America Trust, which Centro took over in May.

It is expected the trust will be merged with the other listed satellite, Centro Retail Trust, a move that would create a trust with about $6.4 billion of assets under management.

There are three listed vehicles under the Centro Properties banner - the parent Centro Properties, Centro Retail Trust and Centro Shopping America. Centro Shopping America comprises 108 core properties valued at $US1.9 billion ($A2.33 billion).

The 62 per cent owned Centro Retail Trust was spun off to house the US shopping centre assets of New Plan Excel Realty and Centro Watt, as well as the management of the former Galileo Shopping America Trust.

Centro Shopping America was placed in a trading halt on Friday, with an announcement due on Monday.

Mr Scott said further details of the strategic review would be provided at its earnings results announcement on Monday.

At Centro Properties' recent annual results presentation, Mr Scott said Shopping America Trust's assets were complementary to Centro Retail's existing portfolio, with both investing in the same regions in the US.

For the year to June 30, Centro Properties reported a 13.5 per cent rise in profit to $335.3 million, after one-off asset sales and property revaluations ahead of market forecasts of $332.1 million.

At the time, Macquarie Equities said the key risks to Centro's growth were concerns regarding the US housing market and US subprime mortgage market.

Such problems might prevent Centro from acquiring and gearing assets and also lead to a deterioration in US consumer spending, the broker said, significantly reducing net property income growth.

© 2007 The Age

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