Scentre Group (SCG)

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This group is formed and listed recently on ASX as a result of the restructuring of the Westfield Group...

http://www.scentregroup.com/

http://www.scentregroup.com/investors/

Scentre knocks back $1bn for Westfield office towers
BEN WILMOT THE AUSTRALIAN NOVEMBER 01, 2014 12:00AM
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Scentre knocks back $1bn for towers
Frank Lowy, chairman of Westfield Corp and Scentre Group. Picture: Renee Nowytarger Source: News Corp Australia
CASHED-UP Malaysian pension group Employees Provident Fund made an offer topping $1 billion for the office towers above Westfield Sydney but its interest was recently rebuffed by the Frank Lowy-chaired mall owner.

The Malaysian fund, which is a heavyweight international real estate and infrastructure owner, has been looking to add to its Australian portfolio and is known to have mandated global property managers to bulk up its holdings.

While the off-market approach, made in the last quarter, may have whet the appetite of Westfield Sydney owner Scentre Group, the mall landlord is not expected to decide whether to put the prime office assets on the block until next month.

Malaysia’s EPF certainly has the heft to become a “capital partner” in the Westfield mould — the group already has a 60 per cent stake in a $780m joint venture logistics trust with the Goodman Group.

Earlier this week Malaysia’s Public Accounts Committee released the findings of a report into EPF’s overseas investments, saying it was satisfied with the way it was administered.

The committee said that EPF’s existing investments in Australia recorded a profit of 700 million ringgit ($241.59m) and the retirement fund was diversifying and expanding its holdings.

Concerns were raised in April over EPF’s rising international reach. It has invested RM6.46 billion in property globally with RM1.55 bn allocated to Australia.

One hurdle to any sale of the Westfield towers is Scentre’s reluctance to sell while asset values are still rising.

There is strong competition for Sydney property and EPF’s recent move was rumoured to have been trumped by a rival bid at an even higher price.

Westfield Sydney accounts for 12 per cent of Scentre’s portfolio and reducing this exposure is seen as a logical play.

Scentre declined to comment yesterday.

Analysts told The Australian that Scentre disliked owning office property for the longer term but they said it may take a cautious approach to selling the towers in case it wanted to eventually redevelop Westfield Sydney.

A sale would allow Scentre to pour the sale proceeds into its higher returning development pipeline. “I think the big question is their ability to redeploy (the funds),” one analyst said yesterday.

Scentre’s development pipeline received a boost on Tuesday when a $450m expansion of Melbourne’s southeast suburban landmark, Westfield Knox, was approved by the local council.

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Scentre in $935m NZ malls selldown
THE AUSTRALIAN NOVEMBER 07, 2014 12:00AM

Peter Allen
Peter Allen says the deal covers Scentre’s five best malls in New Zealand. Picture: James Croucher Source: News Corp Australia

WESTFIELD’S Australian spin-off, Scentre Group, has struck a $NZ1.04 billion ($935 million) deal to sell stakes in a portfolio of five New Zealand malls to Singapore’s Government Investment Corporation, in a transaction foreshadowed by The Australian.

It marks Scentre’s first co-ownership deal since it was created through a restructure of the Westfield empire this year.

GIC and Scentre will co-own five of Scentre’s malls in New Zealand with GIC taking a 49 per cent stake in the portfolio, and Scentre retaining management rights.

Scentre chief executive Peter Allen said the company was reviewing options for its four remaining malls in New Zealand. “They’re part of the overall review we’re doing on the rest of the portfolio,” Mr Allen said.

He said Scentre was considering selling the remaining centres, bringing in a joint owner over the four properties or retaining the centres.

According to Mr Allen, the deal covers Scentre’s five best malls in New Zealand, including Westfield Albany, Westfield Newmarket, Westfield Manukau, Westfield St Lukes and Westfield Riccarton in Christchurch.

The deal was struck at a 4 per cent premium to June 30 book values and on an effective implied cap rate of 6.8 per cent.

Scentre will use the heady $935m in proceeds from the deal to pay down some of its debt, which will take its gearing from 37.6 per cent to 35.5 per cent.

Mr Allen said the transaction would not materially affect the group’s funds from operations — a key concern of fund managers and analysts tracking the company.

Any impact would be offset by reductions in the company’s cost of debt.

The company reconfirmed its FFO forecast of 10.88c per security and its distribution forecast of 10.2c per security for the six months to December 31.

One fund manager, who declined to be named, said it was good to see gearing in the group closer to its forecast range of between 30 per cent and 35 per cent.

Mr Allen said the deal underscored Scentre’s ongoing relationship with GIC, which also co-owns Scentre’s Westfield Parra­-matta and Westfield Whitford.

“When you look at Scentre group we’ve got the DNA of Westfield and we’ve got the capability in executing transactions like this to bring in joint-venture partners,” Mr Allen said.

Mr Allen said there was no deal to develop the centres, the St Lukes, Newmarket and Albany malls were all on the company’s development drawing board.