Macquarie CountryWide Sells Assets in Australia and the USA
In addition, the Trust provided an update on the performance of its global portfolio, which continues to demonstrate resilient underlying real estate fundamentals with positive net operating income (NOI) and rental growth, and solid occupancy levels.
Australian sales – contracts signed for two further asset sales
The Trust has signed unconditional contracts with two different purchasers for the sale of two freestanding supermarket assets (one in Queensland and one in Tasmania) for a total of A$14.7 million, a 5% discount to book value. The disposals will deliver a 21% increase over the original cost base of the assets.
A total of 16 Australian assets have now been sold since 1 July 2008 for a gross sale price of A$238.4 million, representing a 12% premium over the original cost base, 4% discount to last reported book value and an average capitalisation rate of 7.5%.
US Portfolio Sale – further settlement achieved on Inland Portfolio sale
The sale process to an affiliate of Inland has now been completed for a further eight assets for a gross sale price of US$144.1 million (A$198.9 million), all as part of the previously announced US Portfolio transaction.
Settlement of these eight geographically diverse properties (two in both California and Florida and one in Georgia, Illinois, Kentucky and South Carolina) follows the completion of required loan assumption and due diligence inspections.
Global portfolio performance remains resilient
Despite slowing retail conditions, the Trust’s properties continue to demonstrate sound underlying fundamentals, with global occupancy of 95.7%, down from 96.3% at 31 December 2008. During the quarter more than 150 leasing transactions (new leases and renewals) were undertaken, with average rental growth of 1.9%.
US market conditions remain challenging, however despite this, same property NOI growth remains positive at 0.7% for the nine months to 31 March 2009, and rental growth remains positive at 1.5%. The Australian and New Zealand portfolios, which have a higher proportion of base rent secured by supermarket anchor retailers, achieved same property NOI growth of 3.1%.
Macquarie CountryWide’s Chief Executive Officer, Mr Steven Sewell said: “The solid underlying income performance of the portfolio is testament to the Trust’s strategy of investing in quality grocery anchored real estate in above average demographic locations. The predominantly non discretionary nature of the retail offering in the portfolio has historically provided some insulation from material income and valuation declines in softening economic conditions.”
Summary
The Trust is focused on sustaining the performance of the property portfolio and will continue to implement its strategy of selling assets with the aim of reducing overall leverage and strengthening the balance sheet.
Mr Sewell said: “The US Portfolio sale and further Australian asset disposals demonstrates the underlying value of the portfolio and will assist in closing the gap between the latest stated asset backing of the Trust of A$1.48 and the current unit price of 32 cents [1].
“The Trust remains committed to its program of asset sales with the dual aim of reducing our offshore market exposure and headline gearing levels – allowing us to re-weight the portfolio towards the Australian and New Zealand markets.“
