Centro Properties Group

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Centro Properties Group

Type	Public (ASX:CNP)
Founded	1985 (as Jennings Properties Limited)
Headquarters	Melbourne, Australia
Area served	Australia New Zealand USA
Key people	Glenn Rufrano (CEO)
Industry	Property development
Products	Centro Retail Trust Centro MCS Syndicates Centro Direct Property Fund Centro Direct Property Fund International Centro Wholesale Funds
Profit	▼ $469.72 million (2006-07)
Employees	700+ (within Australia) ^[1]
Website	www.centro.com.au

Centro Properties Group Limited is an Australian company (also known as an Australian Stock Exchange listed stapled entity) that is a property investor and manager mainly in shopping centres in Australia, New Zealand and the United States.

Centro is the fifth-largest retail property owner/manager in North America and the second largest in Australia. ^[2] ^[3] With over 682 US properties and 128 Australasian properties.

The entity combines Centro Properties Limited and Centro Property Trust. Eighty two per cent of its net income comes from retail property ownership. As at March 2006, it has a $5.5 billion market capitalisation which makes it one of the Top 100 companies listed on the Australian Stock Exchange. In 1993, it had a market capitalisation of just over $90 million. Its operating profit in the FY ending June 30, 2005 was $253.4 million.

The company is facing financial difficulties due to tightening credit, part of a global credit crunch that some believe to have originated in the subprime mortgage financial crisis.

1 Stock Return Information
2 Properties
3 Locations
4 Financial difficulties
5 References
6 See also
7 External links

[edit] Stock Return Information

Until the events of December 2007, Centro was considered one of the best performing property groups listed on the Australian Stock Exchange.

As at June 30, 2005, Centro owned and managed 224 properties with total funds under management of $9.1 billion. It is the leading arranger of property syndicates in Australia, which enable investors to invest in property assets that are managed by Centro. In 2005 alone it raised $175 million of equity in three new syndicates over a capital raising period on average just over two months. It has 17,000 separate investors including the powerful building and construction superannuation fund Cbus . The company receives income for managing the assets of managed funds and success fees for the management of syndicates. It describes its approach as "cemented co-investment." It generally invests its own equity (between 25% and 50%) in the property managed funds it administers which it says ensures an alignment of its interests with those of co-investors. Eighteen per cent of its net income is generated by profits of funds management activities of this kind. It has been a popular pursuit for large property development and investment businesses to pursue what are seen as lowest risk income of this kind rather the more speculative but larger potential profits associated with development.

[edit] Properties

Centro is Australia's second largest shopping centre owner.^[4] Its largest properties are Centro Galleria in Perth, Centro Bankstown in Sydney and Centro The Glen in Melbourne. Most of its other assets are regionally based shopping centres, most often anchored by major lease deals with Woolworths Limited with which it has a strong relationship. It has over five hundred staff in Australia. Centro's Australian centres normally have the food court named Diner's Life and the fresh produce section named Fresh Life.

In the United States, Centro is the 9th largest owner and manager of retail space with $10 billion property under management. Its US operations are based primarily in Philadelphia, Pennsylvania and Los Angeles, California. Centro has over 250 staff in the US concerned with acquisition, new development, marketing and leasing.

The company's Chief Executive Officer is Andrew Scott, a former Coles Myer Property Managing Director. The Chief Operating Officer Graham Terry is also from Coles Myer Property and the Chief Financial Officer Romano Nenna is formerly the Head of Tax at Coles Myer.

Centro Properties is a widely held company with significant investment from Australian financial institutions.

With its acquisition of New Plan and its announced purchase of the Centro Watt joint venture, Centro is now the fifth largest owner of shopping centers in the US and focuses on community and neighborhood shopping centers and regional malls. Its portfolio of more than 650 properties is strategically located across 40 states and aggregates approximately 111,000,000 square feet (10,300,000 m²) of gross leasable area.

Centro has regional offices in Boston, MA, Santa Monica (Los Angeles), CA, and Plymouth Meeting (Philadelphia), PA

[edit] Locations

Main article: List of Centro shopping centres

Centro owns over 682 US properties and 128 Australasian properties.

[edit] Financial difficulties

On Monday 17 December 2007, Centro announced that it has not been able to roll over AUD$1.3 billion in short term loans that expire on 15 February 2008. This inability to find new financing is believed to be a consequence of the global credit crunch which has made it more difficult for companies to obtain affordable financing or loans. Some have speculated that the American-based subprime mortgage meltdown is the cause for this decline in lending and credit market problems.^[5]

While Centro also announced they would be solvent until at least February 2008, shares in the group closed at AUD$1.36, representing a 77% fall on Thursday's high.^[6] Applications and withdrawals have been suspended from Centro's Direct Property Fund (DPF) and the Centro Direct Property Fund International (DPFI).