Centro sells Adelaide shopping centre following Brisbane settlement

Centro has continued to liquidate its regional and neighbourhood shopping centre assets, conditionally selling its Centro Newton Plaza in Adelaide for a price above $36.2 million.

The group says the conditional sale was achieved at price above the June 30, 2011 valuation, which is recorded as $36.2 million.

At this valuation price, it reflects a yield of 10% based on gross annual rent of $3.6 million.

The centre, part of its MCS 37 Syndicate, is located at 84 Gorge Road in Newtown, four kilometres southwest of the Adelaide CBD.

It has gross lettable area of 13,500 square metres and is anchored by Target and Foodland.

The conditional sale of Centro Newton Plaza follows successful completion of the sale of the syndicate’s Whites Hill Centre in Camp Hill, Brisbane for $15.5 million, reflecting a yield of 10.3%. This price is $200,000 above the June 30 independent valuation.

It includes a contract to sell an adjacent residential property at 35 Thomas Street, Camp Hill, owned by the syndicate for $530,000, a price $30,000 higher than the June 30, 2011 independent valuation.

Whites Hill was built in 2003. It attracts gross annual rent of $1.6 million, has gross lettable space of just under 4,000 square metres and is anchored by Woolworths.

Whites Hill and Newton are two out of six Centros in the MCS 37 syndicate. They others in the syndicate are Centro Albury (NSW), Centro Home (Gladstone, Queensland), Monier Road Shopping Village (Brisbane) and the Samuel Village Shopping Centre (Brisbane).

Sale of the Whites Hill centre follows shortly after the sale of the Centro Lismore in NSW to anchor tenant Woolworths for about $23 million.

Centro is looking to liquidate its retail portfolio under a restructuring plan to form a new entity. Shareholders will vote on the restructure in December

The net proceeds from the sales will help to reduce the syndicate’s gearing ratio from 64.5% to 60.3%.

The syndicate’s external debt facility expires on December 20 2011. It is in advanced discussions with a new financier to refinance this loan.