CFS Retail scraps centre sales

Group won't proceed with divestment after Pacific Retail REIT fails to complete raising.

CFS Retail Property Trust Group (CFX) will not proceed with plans to sell four sub-regional shopping centres to newly formed fund Pacific Retail REIT ahead of a planned listing on the Australian Stock Exchange.

In a statement to the Australian Securities Exchange, CFS Retail said the sale agreements were conditional on Pacific Retail REIT successfully raising capital via an initial public offering (IPO) and therefore the transaction was always subject to equity market risks.

"Unfortunately the IPO has not been able to completed," the group said. 

In July, the group flagged its intention to divest four Victorian centres – Altona Gate, Brimbank, Corio and Rosebud Plaza – for a price of approximately $446.5 million, in line with the group's book value (see Cliona O'Dowd's Collected Wisdom).

"Importantly, the agreements remain conditional on Pacific Retail REIT successfully raising capital via an initial public offering (IPO) and therefore the completion of the transaction remains uncertain," CFS Retail said at the time.

"Assuming that the IPO is successful we anticipate that the transaction will settle in early September 2013."

CFS Retail was to use proceeds to retire debt, as well as providing the group flexibility in pursuing "value enhancing initiatives such as investing in its development pipeline or acquisitions".

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