| Type | Public (ASX: CNP) |
|---|---|
| Industry | Property Development, Property Management |
| Founded | 18 February 1985 (as Jennings Properties Limited) |
| Headquarters | Melbourne, Australia |
| Area served | Australia New Zealand USA |
| Key people | Robert Tsenin (CEO) Centro Properties Group Tony Clarke (CEO) Centro AUS & NZ Michael Carroll (CEO) Centro US Mark Wilson (CIO) Graham Terry (COO) |
| Products | Centro Retail Trust Centro Shopping America Trust Centro Watt Trust Centro MCS Syndicates Centro Direct Property Fund Centro Direct Property Fund International Centro Wholesale Funds |
| Services | Property Development and Management |
| Profit | $469.72 million (2006-07) |
| Total assets | A$30.9 billion |
| Employees | ~ 900+ (within Australia) [1] |
| Website | www.centro.com.au |
Centro Properties Group, commonly known as 'Centro', is an Australian company which provides retail property ownership and management services. It is a listed company with securities traded on the Australian Securities Exchange. The multinational company owns and operates shopping centres in Australia, United States and New Zealand. Centro shopping centres are typically branded with the name Centro in their name. Centro is the fifth-largest retail property owner/manager in the United States,[2] the second largest in Australia,[3] and the largest provider of retail space to Wesfarmers and Woolworths.[2] With over 682 properties in the United States and 128 properties in Australia and New Zealand. Centro’s Retail Property Management Services division undertakes property management, leasing, development management and funds management activities for its managed portfolio. Centro manages both listed and unlisted funds.
In a landmark Australian legal decision,[4][5] in June 2011 the Federal Court of Australia found that eight executives and directors of Centro breached the Corporations Act by signing off on financial reports that failed to disclose billions of dollars of short-term debt. The legal action was commenced by the Australian Securities and Investments Commission, who sued Andrew Scott (ex-CEO), Brian Healey (former chairman), Paul Cooper (current chairman), Romano Nenna (ex-CFO), former non-executive directors Peter Wilkinson, Sam Kavourakis and Peter Goldie, and Jim Hall, who remains on the board.[6] A class action from investors seeking A$200 million in damages due to alleged deceptive conduct and breaches of continuous disclosure obligations has commennced in the Federal Court against Centro Properties Group, Centro Retail Group, and their auditors, PriceWaterhouseCoopers, and relate to conduct from August 2007 to February 2008.[7]
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Centro was established on 18 February 1985 under the name Jennings Properties Limited, and shares were issued in the same year on the Australian Stock Exchange. In January 1991, Jennings Properties Limited was renamed Centro Properties Limited, with the stock being changed across in May 1991. In September 1997, Centro was restructured to become a stapled security structure named Centro Properties Group. Centro is a stapled security comprising one unit in Centro Property Trust (CPT) stapled to one share in Centro Properties Limited (CPL). CPT is the owner of Centro's interests in the properties and CPL, along with its subsidiaries, provides management services to CPT.
In September 1999, Centro acquired the management rights for Prime Retail Property Trust (PRX), and in October 2004, it merged with Prime Retail Group under a court-approved scheme with a ratio of 5 Prime securities per 1 Centro security.
Throughout the 2000s, Centro acquired numerous assets:
Centro Properties Group has two investment products listed on the Australian Securities Exchange. Centro specialises in the ownership, management and development of shopping centres in Australia, New Zealand and the US, as well as managing unlisted investment funds. It has two main categories of investment products: listed and unlisted investments.
ASX: CNP
Centro Properties Group is a stapled security listed on the Australian Securities Exchange, specialising in the ownership, management and development of shopping centres in Australasia and the United States, as well as managing unlisted investment funds. Centro has funds under management of approximately $22.6 billion (2007).
ASX: CER
Centro Retail Trust is a pure retail property ownership fund which derives 100% of its earnings from rental income from retail property investments in Australasia and the United States. Centro Retail Trust's portfolio value is approximately $8.3 billion (2007).
Centro MCS Syndicates are fixed-term unlisted funds comprising a direct investment in retail property assets in either Australia or overseas. Centro MCS is the largest property syndication in Australia with approximately $8.3 billion in funds under management.
Centro Direct Property Fund is an unlisted “fund-of-funds”. Centro Direct Property Fund invests in Centro syndicates and funds, as well as Centro and CER and other appropriate property investments. Centro Direct Property Fund has assets of over $2.0 billion.
Centro Direct Property Fund International is an unlisted “fund-of-funds”. Centro Direct Property Fund International invests in international Centro MCS Syndicates and funds as well as Centro Retail Trust and other property investments. Centro Direct Property Fund International has assets of over $1.4 billion.
Centro Wholesale Funds is an unlisted wholesale funds for institutional and large investors. Centro currently has two wholesale funds with funds under management in excess of $3.8 billion and a close-ended Premium Fund for high net-worth investors.
Until the events of December 2007, Centro was considered one of the best-performing property groups listed on the Australian Stock Exchange.
At 30 June 2005, Centro owned and managed 224 properties, with total managed funds estimated at $9.1 billion. It managed property syndicates in Australia, through which investors were invited to participate in property assets managed by Centro. In 2005 it raised $175 million of equity in three new syndicates. It claimed 17,000 individual investors including the powerful building and construction superannuation fund Cbus. The company receives fund-management income and success fees for the management of syndicates. It generally invests its own equity (between 25% and 50%) in the property-management funds it administers. Eighteen per cent of its net income was generated by fund-management activities of this kind.
Centro shopping centres are typically branded with the name Centro in their name. Centro is the fifth-largest retail property owner/manager in the United States[2] and the second largest in Australia,[3] and the largest provider of retail space to Wesfarmers and Woolworths.[2] Its largest properties in Australia are Centro Galleria in Perth, Centro Bankstown in Sydney and Centro The Glen in Melbourne. Most of its other assets are regionally-based convenience shopping centres, most often anchored by major lease deals with Woolworths Limited with which it has a strong relationship. It has over 900 staff in Australia.[1]
Centro Properties Group in 2005 started developing "Star Zone" shopping-centre entertainment precincts. The first was opened at Centro Karingal, Frankston in outer Melbourne. Star Zone Karingal houses a state-of-the-art Village Cinema complex (Gold Class, V-Max, Cinema Europa and traditional cinemas), a Genesis Gym, restaurants and other food outlets.
In the United States, Centro has over USD $10 billion worth of property under management. Its US operations are primarily in Philadelphia, Pennsylvania and Los Angeles, California. Over 500 staff are employed in acquisition, new development, marketing and leasing activities.
The entity combines Centro Properties Group and Centro Property Trust. 82% of its net income comes from retail property ownership. In 1993, it had a market capitalisation of just over $90 million. Its operating profit in 2005 was $253.4 million. In 2006, it had a $5.5 billion market capitalisation making it one of the top 100 companies listed on the Australian Securities Exchange. However, in the 2008 year, Centro lost more than $2 billion because of a fall in property values and asset write-downs.[8]
In December 2007, Centro announced that it had not been able to roll over A$1.3 billion in short-term loans due to expire on 15 February 2008. It was speculated that the American-based subprime mortgage meltdown was the cause of a decline in lending and credit market problems.[9] While Centro also announced they would be solvent until at least February 2008, shares in the group underwent a dramatic decline.[10] Applications and withdrawals were suspended from Centro's Direct Property Fund (DPF) and the Centro Direct Property Fund International (DPFI).
The company's difficulties were worsened by the 2008 global credit crunch and by two shareholders' class actions claiming up to $1 billion, while the company was required to refinance loans of $4.5 billion in December 2008.[11] In January 2009, they reached an agreement with their creditors including a three-year extension on their $3.9 billion syndicated debt facility.[12] The terms of the three-year plan may involve some restructure and asset sales.
As at June 2008, Centro Properties Group has interests in total assets worth USD $22.6 billion, representing approximately 810 shopping centres in three countries – Australia, New Zealand and the United States. In the United States its portfolio consists of over 104 million square feet (9.6 million sqm) of retail space.
Being established in Australia, Centro Properties Group currently owns and/or manages approximately one hundred and twenty-five properties and is seeking more, despite its credit crisis.
The largest shopping centres managed by Centro in each state/territory are:
Since entering the United States market in late 2003, Centro has acquired, redeveloped and renovated a number of mall properties. On 9 May 2006, Westfield announced the sale of eight United States shopping centres which it deemed to fit outside its strategic plan, which Centro subsequently acquired. Centro in the US is now independently known as Brixmor. [13]
Centro operates four shopping centres in New Zealand—one each in Christchurch and Wellington and two in Auckland.[14]