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Shopping Centers Today -> October 2003
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THREE AUSSIE OWNERS BUY U.S. MALLS
BY IAN RITTER
As one Australian company expands into the U.S. shopping center market, two others are not far behind.
Australian owner Prime Retail Group (no relation to the U.S. outlet developer) is entering the United States with the $488 million purchase of a portfolio of 14 California shopping centers from San Francisco-based M&H Realty Partners.
Prime Retail will hold 48.5 percent of the M&H portfolio; Watt Commercial Properties, Santa Monica, Calif., will own the rest.
Melbourne, Australia-based Prime Retail’s move is driven by a lack of available property back home, its CEO, Andrew Scott, told Bloomberg News.
Prime Retail, an investment trust managed by Australian firm Centro Properties Group, owns stakes in 20 shopping centers across Australia. Watt Commercial owns more than 3.4 million square feet of commercial properties, including retail, office, industrial and multifamily.
Meanwhile, Developers Diversified Realty is joining Sydney, Australia-based Macquarie Bank, which already owns 16 grocery-anchored centers with Jacksonville, Fla.-based Regency Centers, in a $700 million venture that will own 11 U.S. community centers. DDR-Macquarie, to be based in Australia, will own centers currently in DDR’s portfolio. DDR will hold a minority interest and will lease and manage the centers.
For its part, Chattanooga, Tenn.-based CBL & Associates said at press time that it was “exploring a transaction” involving its community center portfolio with an unnamed Australian company.
“This contemplated transaction would not involve any of the company’s regional malls and associated centers nor affect its development programs,” CBL said in a news release. It declined to comment further.
The discussions could mean a joint venture is in the works, said Morgan Stanley real estate analyst Matthew Ostrower.
The announcement followed reports that CBL sought with Australian Galileo Property Trust to form a “listed property trust which will hold U.S. retail assets.” Investment banking firm Prudential Equity Group said at press time that CBL could sell stakes in 17 power centers and 32 community centers to the Australian company for $573 million. CBL would retain a 10 percent interest in the centers and manage them, Prudential said.
CBL has about 60 community centers and 55 regional malls.
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