CPF negotiates $610 million sale of retail portfolio to Westfield Trust - delivers strong total return to stakeholders

24 November 2003

Colonial First State Property Limited, the Manager of the Commonwealth Property Fund (CPF), has exchanged contracts with Westfield Trust for the divestment of CPF’s 50 per cent interests in three shopping centres, namely Marion, Belconnen and Arndale Shoppingtowns for a total sum of $610 million. CPF has held the assets in joint venture vehicles with Westfield Trust for 16 years.

The Marion and Arndale centres are located in South Australia and comprise total lettable areas of 135,000 and 40,000 square metres respectively. Belconnen Shoppingtown is located in the Australian Capital Territory and comprises a total lettable area of 76,000 square metres.

CPF Fund Manager, Rod Cowdroy said: "The competitive tender process generated strong interest in the market and we were able to realise an excellent price for stakeholders, at a significant premium to appraised value."

"The sale demonstrates Colonial First State Property’s commitment to an active management style realising superior performance at the asset level, and providing liquidity to our stakeholders, by capitalising on the strong market sentiment for quality retail assets," he said.

"By selling these particular interests in this manner, we have been able to optimise a premium on sale over and above their appraised value."

"This is a great achievement given we had maximised their appraised value through active management during the period the assets were held by the Fund."

The properties were marketed through a competitive private placement process conducted by Jones Lang LaSalle.

After settlement of the three shopping centres, CPF will be comprised of five assets with a combined value of approximately $1.5 billion. The remaining assets include Indooroopilly Town Centre, 101 Collins Street, Melbourne (together with its adjoining development at 11 Exhibition Street), 12 Moore Street, Canberra and part interests in Grosvenor Place, Sydney and 60 Margaret Street, Sydney.

Editors’ Notes – About CPF

In 1997, Colonial First State Property Limited (formerly Commonwealth Property Limited) commenced management of the Fund, and together with the existing investors, restructured the Fund and implemented a unique fixed life strategy designed to optimise asset and Fund performance and provide liquidity to unitholders via a management model that aligned the interests of investors and the Manager alike.

Since this strategy was implemented in 1997, the Fund has delivered a total return of approximately 10% per annum on a rolling basis. On settlement of the current transaction, a total of $1.1 billion will have been returned to investors over the life of the Fund, enabling them to rebalance their property portfolios and facilitate investment in new opportunities. In line with this strategy, CPF recently sold a 50% share in Grosvenor Place Sydney for $393.5 million.