CENTRO is looking to wind up its seven year old MCS 15 syndicate by putting the fund's $96 million property portfolio on the market.
The MCS 15 fund is now approaching the end of its initial term, being April 20 2009.
Centro’s syndicate funds management general manager Gerard Condon said the sales will be in the best interests of investors.
He said the Centro MCS 15 syndicate was launched in April 2001 and has performed well for investors providing a 15.65% average annual total return on investment since inception to June 30 2008.
“As part of the 2009 financial year business plan, Centro MCS reviews the performance of each of the centres and syndicates within the Centro MCS portfolio taking into account current market conditions and future potential of each syndicate and its centres.
“Following the completion of the business plan for Centro MCS 15, the RE has determined it to be in the best interests of investors to market the properties in the syndicate for sale; and, if a satisfactory sale price can be achieved for both the properties, then the RE intends to take the necessary steps to wind up the syndicate,” he added.
Condon said whilst the current property market is characterised by tight credit conditions and higher debt funding costs.
He believes certain properties listed for sale are attracting solid investor interest.
“In these cases acceptable sale prices are being achieved irrespective of credit market constraints. In other cases, prices significantly below market value are being offered for certain assets,” he added.
The fund owns two properties in Centro Meadow Mews,
The sale campaign is expected to run from late September to October 2008. If a satisfactory sale price is achieved, then allowing for a due diligence and notice period, the sale of the properties is expected to be finalised by early 2009.
Centro holds an approximate 14.7% look through interest in this syndicate via its holding in the Centro Direct Property Fund.
Condon said if a satisfactory sale price cannot be achieved, like in the case of the Centro MCS 28 syndicate’s failed $310 million Centro Bankstown transaction, alternative strategies will be considered.
He said the other options include selling one but not both the properties and convening an investor meeting to enable investors to consider and vote upon a proposal to extend the syndicate term for a further period of up to three years.
“This would allow property sales to be considered at a time when market conditions are more favourable,” he concluded.
Australian Property Journal
