A host of suitors, which reportedly includes private equity real estate firm The Blackstone Group, have submitted bids for assets owned by Centro Properties, according to various media reports.
The offers come as a debt stabilisation agreement set in 2008 between the ailing shopping centre investor and its creditors nears expiry, the The Financial Times has said. Centro, which owns a large portfolio of properties in the US, was hit especially hard by the financial crisis. According to the FT, the company currently has debts of around A$18 billion (€13.7 billion; $18.3 billion).
Centro has roughly $18.6 billion of assets in the US, according to its website, and invests in shopping centres via a series of managed funds. The REIT has been trying to offload its US operations for the past two years. In September 2008, a $714 million deal to sell 29 of its 31 properties in the open-ended Centro America Fund (CAF) to an unnamed private real estate investment advisor collapsed. The CAF portfolio properties totalled 5.1-million-square-feet and spanned 15 states in the US.
Last month, Centro said there were several “expressions of interests in both Australia and the US” in its assets, adding that the bids for its shopping centres should have been lodged by 17 December, 2010. “Evaluation of the proposals received will take time due to this being a complex process that will require consultation with relevant stakeholders, including lenders, and we will keep the market informed as appropriate,” Centro said in a statement to the Australian stock exchange.
The FT also included Singaporean sovereign wealth fund GIC, private equity firm Centerbridge Partners and hedge fund Paulson & Co. in a list of potential bidders, as well as the distressed debt departments of several international banks. Centerbridge and Paulson teamed up with Blackstone to acquire the US hotel chain Extended Stay out of bankruptcy protection for $3.93 billion in May last year.
None of the parties involved could be reached for comment.
The Blackstone Group has yet to make an investment in Australia since opening its first office in the country in May last year, despite taking part in bids for Australian assets such as hospital operator Healthscope.