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MCW buys 7 shopping centers in Europe for A$571 mln

Austral Macquarie CountryWide Trust has purchased seven shopping centers in Poland and Germany for A$571 million (€351 million) in its first foray into Europe.

The trust said the deal will be earnings per unit (EPU) accretive by 1.3% increased its EPU outlook for fiscal 2008 to 16.1 cents, from 15.6 cents. Macquarie CountryWide is buying two „hypermarket” anchored shopping centres in Germany and five in Poland. CEO Steven Sewell said the properties are anchored by two of Europe's largest retailers, France's Carrefour Group and Germany's Rewe Group. „These transactions represent Macquarie CountryWide's initial entry into Europe,” he said. It's also part of a strategy to redeploy capital from strategic asset sales and invest in accretive acquisitions. The properties are being acquired for a combined yield of 6.5%, pre-acquisition costs. The five sub-regional shopping centers in Poland will be acquired for A$377 million ($312 million) and the two German centers for A$194 million ($161.5 million). A trust spokesperson said the Polish properties are mainly based in southern major cities and up to eight years old.

Each is a Carrefour hypermarket and Macquarie Countrywide will have first right of purchase in the event of a disposal by the French company. Lessees are international and national specialty retailers contributing more than 80% of income. The average occupancy of the buildings is 96.8%, with a weighted average lease expiry of 3.9 years. The trust said Poland, which a population of 38.2 million, was experiencing an economic boom that was expected to continue with GDP forecast at 4.8% over the next two years. The German centers are being purchased from Rewe Group, the country's second largest grocery retailer. They have an occupancy rate of 93% and are leased to Rewe-branded hypermarkets and other international and national retailers. Both centers are situated in inner city locations on major roadways.

Germany is the largest consumer market in the European Union with 82.5 million people and gross domestic product growth forecast to average two per cent a year over the next five years. „We are very excited about establishing an initial presence in Europe and the potential to increase unit holder returns from this transaction,” Sewell said. „We are confident that we can deliver potential upside from the portfolio.” The establishment of new relationships with key international retailers and substantial asset owners in Europe, combined with the Macquarie global network, was expected to drive the trust's growth within the region and lead to further opportunities, he added. The deals will be funded by debt issuance, the proceeds from the sale of a 50% stake in the trust's New Zealand assets and a placement of units to institutional investors to raise A$120 million. Settlement of both portfolios is expected by June 30. (smh.com.au, egoli.com.au)