Business Description:
CFS Retail Property Trust (CFX) is a retail sector-specific Australian Real Estate Investment Trust (A-REIT) which invests in high quality regional and sub-regional shopping centres across Australia. It boasts some of Australia's premier centres including Chadstone in Melbourne, Chatswood Chase in Sydney and the Myer Centre in Brisbane. It is managed by a subsidiary of Commonwealth Bank of Australia.

Strategy Analysis:
CFX owns and manages shopping centres in Australia. Centres are located close to major metropolitan areas and are anchored by long-term leases with supermarkets and department stores. Small specialty stores feed off the stable consumer traffic generated by the major retailers and pay higher rents. CFX aims to expand and diversify its portfolio through the redevelopment of existing sites and further acquisitions within Australia. Funding is sourced from debt, equity and strategic asset sales. Expansion of existing centres creates meaningful value over the long-term with relatively low risk, dependent on growing populations and barriers to entry for potential competitors. Acquisition of a portfolio of Direct Factory Outlets increases future growth options but at the lower quality end of the spectrum. Near-term focus is on selling assets, either 100% of smaller malls or 50% stakes in large malls. Proceeds will fund developments and unit buybacks or reduce gearing. Improved geographic diversification via acquisitions is a longer term goal. CFS Retail Property Trust reported NPAT up 69% to $532.6m for the year ended 30 June 2011. The Trust generated a profit, reflecting revaluation gains and net property income growth across static shopping centres along with greater income generated by those assets the Trust has redeveloped. Revenues from ordinary activities were $908.9m, up 34% from last year. Diluted EPS was 18.63 cents compared to 12.40 cents last year. Net operating cash flow was $341.9m compared to $270.1m last year. The final dividend declared was 6.4 cents, taking the full year dividend to 12.7 cents compared with 12.5 cents last year. Over the next 12 months the Trust will focus on progressing key projects in its development pipeline and drive results through its long established relationships with domestic and international retailers.