Colonial First State Property Retail Pty Limited, Manager of CFS Retail Property Trust (CFX), announced that the Trust has agreed to acquire four retail outlet centres which are currently part of Austexx Proprietary Limited’s Direct Factory Outlet portfolio. The Manager believes these centres offer strong fundamentals and will support the creation of long-term unitholder value. CFX will acquire the following four DFO centres – DFO Homebush, Homebush, New South Wales; DFO Essendon and Homemaker Hub, Essendon, Victoria; DFO Moorabbin, Moorabbin, Victoria, and DFO South Wharf and Homemaker Hub, Melbourne, Victoria (50% interest). The DFO centres will be acquired at a cost of $498 million (excluding transaction costs) which reflects an 8.26% weighted average capitalization rate. Funding will be sourced through a fully underwritten $540 million institutional placement.
Michael Gorman, Fund Manager of CFX said: “This is a unique opportunity to enter an increasingly important, yet immature retail format and sub-sector in Australia. We are pleased to have been able to negotiate this acquisition, while retaining a strong balance sheet. The DFO centres reinforce the Trust’s position as one of Australia’s leading retail real estate owners and are complementary to CFX’s existing strategy and portfolio.” Darren Steinberg, Head of Property said: “This is a significant milestone for CFX. It provides investors with exposure to a retail format which management expects, based on overseas experience, can achieve sales growth in excess of regional and sub-regional shopping centres over the medium term.”
As part of the acquisition, CFX will own the Australian ‘DFO’ and ‘Homemaker Hub’ brand names. CFX plans to use these brands in VIC, NSW, WA and SA providing the ability to selectively expand CFX’s presence in these markets in the future. CFX will provide Austexx with an exclusive license to use the brands in QLD, TAS and ACT. CFX will leverage the expertise of Colonial First State Global Asset Management applying its intensive asset management approach to reduce vacancies, remix tenants where appropriate, increase tenant interaction, undertake targeted marketing and enhance lease structures across the DFO centres to drive growth and enhance value. The acquisition of the DFO centres will be funded by a fully underwritten $540 million institutional placement.
CFS Retail Property Trust is a retail sector-specific Australian Real Estate Investment Trust (A-REIT) which invests in high quality regional and sub-regional shopping centres across Australia.
http://www.traderdealer.com.au/Fundamentals/cfx
Tags: CFX, Colonial First State Property, New acquisition, Property Trust
