Centro Property Group’s “Christmases” have all come at once this year. Earlier this week, it announced it has experienced revaluations adding some $129 million to its U.S based retail fund CER then yesterday it announced that its entire Australian portfolio had leapt a massive $280.9 million.
The revalued portfolio contains all of Centro’s directly owned Australian assets and is now valued at $3.1 billion — Centro’s total funds under management has increased to $11.4 billion.
Centro chief executive Andrew Scott said that retail centres that have recently completed or are currently undergoing developments realised some of the largest capitalisation rate improvements, ranging from 0.75% to 1.00%.
“This further endorses the positive impact that Centro’s development program continues to have on both owned and co-owned assets,” Scott added.
Scott said that interestingly, Centro’s book valuation gain has added significant value to investors’ pockets.
“This represents a 25.3% increase from the $9.1 billion as at June 2005.”
Centro chairman Brian Healey added that the impressive gains represent a 10.0% book value or 34 cents per Centro security increase from this year’s asset revaluations.
“The strong revaluations are due to continued strength in demand for the high quality Australian shopping centres included in Centro’s portfolio, the positive impact of the substantial redevelopment program and Centro’s intense specialist retail management focus and expertise.”
All revalued properties recorded positive book valuation gains with the most significant gains occurring at Centro Buranda (+29.5%) and Centro Colonnades (+25.0%), reflecting the strong contribution from Centro’s redevelopment program at these assets.
Other notable gains included Centro Box Hill (+21.3%) and Centro Whitehorse (+19.0%), resulting from the stronger trading performance and outlook for these centres.
Over 40% of the portfolio’s book valuation gain was from Centro’s investments in regional sized shopping centres, the retail property group added.
“Approximately 57% of the annual valuation growth is driven by higher portfolio income, both from development and organic growth, while the remaining 43% valuation growth is derived from capitalisation rate improvements,” Scott declared.
By Ted McDonnell
