6 October 2002
James Fielding Group (Greg Paramor) and Perpetual Trustees Australia Ltd will hold 50% each in a new joint venture, Perpetual James Fielding, which will offer active management of listed property securities to the retail, masterfund & institutional markets in Australia. Mr Paramor said the ASX listed property trust index had had 18% compound annual growth since 1997 and they believed the sector would continue to offer strong long-term growth, though the rate of return might slow from time to time. Perpetual managing director Graham Bradley reckoned the joint venture would grow faster than if Perpetual started its own active securities management alternative. Perpetual’s existing index-based portfolios will switch to active management and be managed by the joint venture.
Westfield America Trust will sell to a subsidiary of British insurer Prudential plc (Prudential Corp) the 50% of Garden State Plaza it acquired in the Rodamco North America takeover for $US387.6 million in stages through to May 2005, and buy from Prudential 50% of Fashion Square Sherman Oaks, a regional mall with significant redevelopment potential in Los Angeles’ San Fernando Valley, for $US67 million. Westfield America increases its portfolio to 62 centres. Westfield had half of Garden State Plaza on its books in December at $US336 million, raised that to $US706 million after the Rodamco deal and has increased the value from this deal to $US775 million (though some of the value is 3 years away and in the form of an option).
Developers Diversified Realty plans to take over JDN Realty Corp with a 0.518-share:1 offer valuing JDN at just over $US1 billion, including $US584 million of assumed debt. JDN owns/operates 81 shopping centres, Developers Diversified 362. Combined, they will have 7.15 million mÂ² of gross lettable area. The overal capitalisation rate on the transaction is 9.8%, or 10.6% after adjusting for non-earning land. JDN has a bigger development pipeline — 280,000mÂ² in 17 properties.