Westfield Trust finalises CFM transaction with APPF acquiring a 50% share of Westfield marion for $323 million
15 December 2003
Westfield Trust (ASX:WFT) today announced that Australian Prime Property Funds (APPF) would become its new joint venture partner in the Trust’s Marion shopping centre in Adelaide, after facilitating APPF’s acquisition of a 50% stake in the centre for $323 million from Commonwealth Funds Management (CFM).
“We are pleased with the outcome of the transaction with APPF, which is the final stage of the CFM portfolio deal,” said Westfield Trust Managing Director, Steven Lowy.
“We welcome the expansion of our relationship with APPF as this deal represents the second joint venture between our two groups, the first being at Westfield Carindale in Brisbane,” Mr Lowy said.
The net result to WFT of the overall transaction with CFM is that:
- WFT will acquire CFM’s 50% interest in Belconnen (Canberra, ACT) for $230 million, at an initial yield of 6.75% taking its total interest in this centre to 100%;
- WFT will introduce APPF to purchase CFM’s 50% interest in Marion (Adelaide, SA) for $323 million, at an initial yield of 6.50%; and
- WFT will sell its 50% interest in Arndale (Adelaide, SA) to Centro Property Group (ASX:CEP) for $60 million, at an initial yield of 7.50%. CEP will also acquire CFM’s 50% interest in this centre for $57 million.
WFT’s net acquisition price of $186 million will be funded from part of the proceeds of the Trust’s A$850 million issue of unsecured notes and call options. WFT’s gearing is forecast to be 36% at the completion of the transaction.
The Trust’s distribution per unit growth forecast remains at 4.5% for calendar year 2003 and 4.0% for calendar year 2004.
The CFM transaction is expected to settle in late December 2003. The sale of WFT’s interest in Arndale to CEP is expected to settle in January 2004.
Westfield Marion is a super regional shopping centre located in Adelaide, South Australia. It is the largest shopping centre in Adelaide and one of Australia’s top 10 shopping centres. The centre has a total area of more than 119,000 square metres and includes Myer, David Jones, Target, Big W, Kmart, Harris Scarfe, Woolworths, Coles, Bunnings, Greater Union cinemas and more than 292 specialty retailers. As at September 2003, the centre had total annual retail sales in excess of $530 million.
Westfield Belconnen is a regional shopping centre located in Canberra, ACT and has significant redevelopment opportunities. Currently, the centre has a total area of more than 75,000 square metres and includes Grace Bros, Kmart, Coles, Woolworths, Hoyts Cinemas and more than 200 specialty retailers. As at September 2003 the centre had total annual retail sales in excess of $377 million.
Westfield Trust with gross assets of $12.4 billion is Australia’s largest listed property trust. With a current market capitalisation of $7.5 billion it represents approximately 16% of the Australian Property Trust Index.
The Trust’s property portfolio will comprise interests in 50 shopping centres in Australia and New Zealand, with 3.1 million square metres of gross lettable area servicing more than 9,400 retailers who generate in excess of $13.9 billion of retail sales.