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Mall owner Centro puts itself up for sale

January 02, 2008|From Times Staff and Wire Reports

Centro Properties Group, Australia's second-largest shopping center landlord and owner of nearly 700 U.S. malls, said Tuesday that it was seeking buyers for the company -- a victim of the deepening global credit crunch.

In the U.S., Centro is the fifth- largest owner of shopping centers, with holdings in 40 states having total leasable space of nearly 108 million square feet.

Many of the company's U.S. properties are small centers or strip malls acquired last year as part of Centro's $4-billion purchase of New Plan Excel, a New York-based shopping center real estate investment trust.

Centro's California properties include Puente Hills Town Center, Eagle Rock Plaza and Montebello Plaza.

The company's U.S. arm, which is based in New York, employs more than 800 people.

Melbourne-based Centro lost 80% of its market value last month when it revealed that it was struggling to refinance its debt amid the credit market fallout from rising defaults in U.S. sub-prime mortgages.

The company faces a Feb. 15 deadline to refinance part of its $3.4 billion in debt, much of it amassed during a buying binge over the last two years.

Centro said it would consider offers for all of the company or for assets including its Australian and U.S. funds. Other options include recapitalization or issuing more stock, the company said.

Analysts said Centro expanded too quickly, and they predicted that competitors would line up in hopes of grabbing shopping centers at fire-sale prices.

"In recent days, we have received a significant number of unsolicited expressions of interest from a range of strategic and financial investors in potential investments in the group and certain of our assets," Centro Chairman Brian Healey said in a statement.

"This will enable interested parties to substantiate their interest, and for all such proposals to be evaluated from the perspective of the best interests of all Centro stakeholders," Healey added.

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