Macquarie CountryWide Trust has signed agreements to sell its 75% interest in a US portfolio of 86 properties, owned in partnership with Regency Centers (Regency), to Global Retail Investors for a gross sale price of $1.30 billion. Global Retail Investors is a joint venture between the California Public Employees’ Retirement System and an affiliate of First Washington Realty.
The portfolio accounts for approximately 80% of the Trust’s assets in the US. The entire deal will eliminate A$1.38 billion of US’ commercial mortgage backed securities debt scheduled to mature in coming years, and will release approximately A$226 million of gross cash proceeds.
Upon completion, the Trust’s balance sheet gearing is forecast to be approximately 36%, however, due to the de-leveraging, the transaction will negatively impact Trust’s earnings and net asset backing.
Steven Sewell, CEO of Macquarie CountryWide, said: “The Trust has taken a series of decisive steps to enhance its balance sheet, mitigate or eliminate refinancing risk, re-weight the portfolio back to the domestic market and bridge the gap between the current unit price and underlying asset backing of its portfolio. In response to deteriorating real estate market fundamentals and the subdued refinancing market conditions expected to persist in the US over the medium-term, a number of options were considered. It was determined that the sale of this particular portfolio would deliver the most substantial strengthening of the balance sheet.”
