Centro Retail Australia (CRF) announces that it has entered into unconditional contracts with Perron Group, for the sale of a 50% ownership stake in three regional shopping centres, being Galleria in Perth, The Glen in Melbourne and Colonnades in Adelaide. The ownership stakes in the three assets have been the subject of a global of marketing campaign undertaken by JLL over the last month, with strong demand shown by domestic and offshore parties. From the initiation of this process, Perron Group proactively engaged with CRF, process CRF completing their due diligence investigations a agreeing documentation in a very and timely manner. This has resulted in the sale of a 50% interest in the three assets to Perron Group for total consideration of $690.4 million, representing a 3.7% premium to book value (pre transaction costs) and average yield of 6.1%. As part of the co-ownership arrangement, CRF will provide property management, ownership development and leasing services from its existing fully integrated management platform.
The strong investor demand for the quality assets supports both the underlying portfolio value and net tangible assets of CRF, and maintains the services business fee streams with assets under management remaining unchanged. Proceeds from the sale, net of transaction costs, will initially be applied to reducing the drawn amount of the core debt facility, with the intent to restructure this and other facilities in the future.
CRF’s Chief Executive Officer, Steven Sewell said: “Entering into this strategic CRF’s alliance with Perron Group is a redefining event for CRF. The Perron Group is privately owned and had the flexibility to make this compelling offer early in the transaction process. Their ability and willingness to commit to this transaction in such a condensed time frame is a testament to the quality of the CRF assets and management team. Perron Group’s commitment also reflects their insightful view on the synergies that will arise from the alliance between the two groups.
Perron Group is a privately owned Perth based Group of Companies whose main business activity is property investments. Other activities include automotive distribution, listed and unlisted equities and land development. The property portfolio consists of commercial office buildings, retail shopping centres and industrial property in Western Australia, New South Wales and Victoria. CRF was established in December 2011 and is a fully vertically integrated Australian Real Estate Trust specialising in the ownership and management of Australian shopping centres. CRF has $6.7 billion of shopping centres under management and employs over 600 people, with offices in Melbourne, Sydney, Brisbane, Perth and Brisbane, Adelaide. CRF provides a full suite of property services including retail development, property management, leasing, financial, sustainability and fund administration.