Macquarie in Monster US Retail Trust Deal

Australian investors will gain the opportunity of investing in one of the world's largest retail investment vehicles through a new Macquarie Bank Trust to be floated on the Australian Stock Exchange in late November. Macquarie Bank Limited and United States group Developers Diversified Realty Corporation, one of the leading owners, operators, developers and acquirers of retail community centres in the United States, announced plans in Sydney today to jointly list a property trust specialising in North American community shopping centres.

DDR Corporation is listed on the New York Stock Exchange.

Macquarie’s Head of Real Estate, North America, Mark Baillie said that Macquarie are excited at the opportunity to present Australian investors with a premium offering in this segment of the US retail market.

“The management of the trust combines both Macquarie’s funds management and DDR’s asset management expertise – bringing together “best of breed” management platforms from the Australian and US markets,” Baillie concluded.

The Macquarie DDR Trust (MDT) will have an 81% share in a diversified portfolio of 11 community shopping centres in the United States valued at $US744.5 million. MDT plans to raise up to A$550 million from Australian investors, approximately 75% institutional and 25% from retail.

The offer is jointly and fully underwritten by Macquarie Equities and UBS.

The Trust is forecast to achieve an annualised return of 9% on the issue price for the period from the Allotment Date to 30 June 2004. A distribution of 5.48 cents (Australian) per unit for the same period is also forecast. Starting from March 31, 2004, distributions will be paid quarterly. The retail offer for MDT units opens on 27 October and closes on 14 November.

The minimum investment will be $A2000 for 2,000 units.

On Thursday, Macquarie Property announced it has applied to the Korean Government seeking the requisite approvals to create Macquarie’s first real estate investment trust (REIT) to be listed on the Korean Stock exchange in early 2004.

If approval is granted, the Macquarie Central Office Corporate Restructuring REIT, or MCO CR REIT, will acquire the 22-storey Kukdong Building in the Seoul CBD as its initial asset for KrW158 billion or about A$200 million.

MCO CR-REIT will be managed by Macquarie International Asset Management Company (MIAMC), a wholly owned subsidiary of the Macquarie Group licensed by the Ministry of Construction & Transportation in Korea, under the Real Estate Investment Company (REIT) Act.

Total equity to be raised for the REIT will be approximately $A95 million.