Charter Hall keeps watch on Centro Carolyn Cummins Commercial Property Editor August 21, 2010
THE Charter Hall Retail REIT would be interested in any Centro Properties Group assets that are offered for sale, as the trust looks to boost its presence in the newly termed household goods sector.
For the year to June 30, the trust reported operating earnings of $98.7 million, down from $174.5 million, with operating earnings per unit at 6.62, down from 12.38. The trust plans to consolidate its units and forecast an adjusted earnings guidance of 5.3 to 5.6 for the 2010-11 year.
Brokers said the result was in line with expectations.
Management of the trust, formerly the Macquarie CountryWide Trust, was taken over in March by Charter Hall. It said it would funnel cash from its exit from the US and New Zealand into Australia and its smaller business in Poland.
The trust ventured into the US in February 2001, signing a $70 million joint venture with the Regency group as its springboard into the local neighbourhood shopping centre market.
These sites are usually less than 25,000 square metres and are anchored by a supermarket and discount-style retailers such as pharmacies and outlet stores.
Steven Sewell, the trust's chief executive, said the household goods sector was different to the traditional bulky goods, as the centres were enclosed like a shopping mall but focused on electronics, furniture, baby goods outlets and home storage systems.
He said outlets such as Charter Hall's new HomeHQ centre at Artarmon were a good example of the type of centre retail REITs would target.
Charter Hall Retail recently bought a site at Mile End in South Australia and the HomeHQ at Nunawading, Melbourne, offering a range of household stores such as Howards Storage, Babies Galore, JB Hi-Fi, Harvey Norman, Fantastic Furniture and the Good Guys electronics outlets.
Mr Sewell confirmed that if any Centro assets were available which complemented the trust's strategy, he would be a buyer.
Centro, which is undergoing its own restructure, has issued documentation for the sale of a half-share of the management of its syndicate business, as well as a $400 million capital injection.
As part of the restructure one of Centro's advisers, JPMorgan Chase, is marketing $484.6 million of bonds backed by a loan to the overall Centro Properties Group.
Distribution per unit was 5.30, down from 7 in the previous year. End.
CNP Price at posting:
18.0¢ Sentiment: None Disclosure: Not Held
