One of Sydney's largest shopping centres Chatswood Chase has been bought by CFS Gandel Retail Trust and the Commonwealth Bank for in excess of $500 million. CFS Gandel Retail Trust, an arm of funds management group Colonial First State, announced to the ASX that it had paid $251.6 million for a half share of the centre. This brings the value of one of Sydney’s largest shopping centres to around $503 million. Chatswood Chase had been on the market for a reputed $475 million and is Gandel’s first venture into the regional shopping centre market in Sydney. Losing bidders included Mirvac. Gandel said the property was being acquired in a joint venture with Commonwealth Bank, adding that the acquisition provided strong portfolio and fund benefits to the trust. The acquisition gives Gandel its first regional shopping centre in Sydney and provides exposure to the high income demographic of Sydney upper north shore.” As part of the arrangements, Commonwealth Bank would receive an increasing fixed-rate income distribution based on its share of the purchase cost. Gandel would receive its 50% share of the income from the property plus any excess income over the Commonwealth’s increasing fixed rate distribution, which has been set with regard to an underlying five-year debt swap rate. Chatswood Chase, covering 49,270 sqm over four levels, is one of Australia’s best performing shopping centres. Gandel said the joint venture agreement included a first right of refusal for it to acquire Commonwealth’s interest in Chatswood Chase. “The joint venture with the bank is a great example of how the manager has been able to access synergies within the bank in a way that benefits unitholders and enables the trust to acquire an interest in one of the best shopping centres in Australia,” Gandel fund manager Bevan Towning said. Gandel said its share of the purchase would be funded via debt through a medium-term note issue prior to settlement, expected on or around November 14.
Gandel & CBA pounce on Chatswood
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