Archive News

16 December 2002

APPF Sells Redbank Plaza
Australian Prime Property Fund (APPF) Retail, managed by Lend Lease Real Estate Investments Limited (LLREI), has entered into an unconditional contract with the Yu Feng Group to sell Redbank Plaza, Ipswich Queensland, for $93 million. The sale price reflects a significant premium, of 11.6%, to the Fund’s current book value for the asset ($83.3 million). Settlement will occur on or before 31 March 2003.

Redbank Plaza is a three level sub-regional shopping centre with a gross lettable area of 37,100 sqm and over 110 specialty stores. APPF Retail acquired the Suncorp Metway Retail Property Fund (SMRPF), comprising a portfolio of four assets, which included a 100% interest in Redbank Plaza, in August 2001.

APPF Fund Manager, Brett Robson said the significant premium to book value reflects Lend Lease’s success in leasing and repositioning the asset since acquisition.

“The sale represents a superior opportunity to enhance investor returns and is consistent with the current Fund Strategy of focusing predominantly on the ownership and expansion of its high-performing core major-regional shopping centres.

“We actively manage our assets to enhance returns for our investors and Redbank Plaza provides a great example of our ability to achieve results.

“Since acquisition, our team has focussed on intensive leasing and remixing, with in excess of 60 specialty retailer lease negotiations, representing over 55% of the centre’s specialty retailers, having been completed since August 2001. As a result, vacancies have been reduced from 10 at acquisition to only 3 stores currently.

“The results are apparent in the strength of specialty sales, with annual sales increasing by over 8% for the year to October 2002, and ultimately reflected in the value derived through this sale.” Mr Robson said.

Following the sale of Redbank Plaza, APPF Retail retains a unique and attractive investment portfolio with interests in seven assets, which includes one sub-regional and six major-regional centres, valued at $1.1 billion.

The portfolio is close to full occupancy, has above benchmark sales productivity levels and below benchmark specialty occupancy costs. The portfolio has identified masterplan expansion opportunities of almost $700 million (100% interests) to maximise the investment performance of its core major-regional assets over the next five years. These include the $40 million expansion at Sunshine Plaza in Queensland, nearing completion in December 2002 and the $210 million expansion of Erina Fair in NSW, programmed for completion by Christmas 2004 (both in conjunction with joint owner General Property Trust).

The sale proceeds will initially be used to retire debt, increasing investment capacity to fund the identified masterplan expansions together with additional acquisitions. The sale is expected to further boost the investment performance of APPF Retail, which has provided investors with a total return of 10.6% (after fees) for the year ended 30 September 2002.

In support of both current performance and the Strategy for the Fund, $486 million in new equity has been raised, from both existing investors and fourteen new investors, over the past three years.

David Barry, of Barry & Nilsson, lawyer for the Yu Feng Group, said the acquisition increased the Yu Feng portfolio to 19 retail centres in South-east Queensland, and strengthened the Group’s western Brisbane and Ipswich exposure, which will now include Toowong Village and Tower, Booval Fair and Redbank Plaza. The sale was negotiated by Stewart Gilchrist of CB Richard Ellis.

For enquiries:
Brett Robson
APPF Fund Manager
Ph: 02 9237 5404

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NOTE TO EDITORS:

APPF was established in 1989 and has grown to comprise three sector-specific unlisted property trusts, with combined assets of $1.6 billion in the Retail, Commercial and Industrial property sectors.

APPF provides institutional investors with the opportunity to invest in professionally managed portfolios of prime Australian property, with the potential to provide stable income and capital appreciation.

APPF currently consists of: