Centro acquires US property trust
Centro Properties Group has predicted its acquisition of Heritage REIT will have a positive flow-on effect for investors via the creation of numerous new funds.
The acquisition involves Heritage Property Investment Trust, a US listed, property real estate investment trust that comprises 157 neighbourhood and community shopping centres across 27 American states.
Subject to the transaction’s completion, Centro will then spin-off a new wholesale fund to its security holders that will feature 33 of its own Australian shopping centre interests.
From this, the stabilised core assets from the Heritage retail property portfolio is expected to provide a pipeline for Centro’s unlisted funds through the creation of two or more new Centro MCS syndicates and a new Centro International Wholesale Fund.
As a consequence, Centro predicts its distributions per security from the 2007 financial year will increase by 0.75 cents.
Centro chief executive Andrew Scott said the company chose the acquisition because it fitted with its business model of buying stocks that added value to investors.
The sale amounted to US$1.83 billion ($A2.43 billion) and took approximately four months for both parties to come to agreeable terms.
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