cfs retail property trust group (cfx) - First State Investments

Responsible Entity:
Commonwealth Managed Investments Limited
ABN 33 084 098 180
AFSL 235384
Colonial First State Property Retail Pty Limited
ABN 19 101 384 294
Manager of CFS Retail Property Trust Group
Registered Address:
Ground Floor, Tower 1, 201 Sussex Street
Sydney NSW 2000 Australia
Principal Office of the Manager:
Level 4, Tower 1, 201 Sussex Street
Sydney NSW 2000 Australia
Telephone: 02 9303 3500
Facsimile: 02 9303 3622
27 June 2013
CFS RETAIL PROPERTY TRUST GROUP (CFX)
June 2013 valuations and Emporium Melbourne update
Colonial First State Property Retail Pty Limited, the Manager of CFS Retail Property Trust Group (CFX),
announces that 19 of CFX’s 30 assets have been independently valued over the six-month period to 30 June
2013, resulting in an estimated $20.7 million 1 or 0.4% decrease on prior book value.
The valuations in the six-month period to 30 June 2013 comprised:
Property
CFX
ownership
(%)
New valuation
by ownership
($m)
Variance to book
value by
ownership 1
($m)
Change 1
(%)
Prior
capitalisation
rate
(%)
New
capitalisation
rate
(%)
Bayside Shopping Centre, VIC 100 583.5 0.5 0.1 6.50 6.25
15 Bowes Street, ACT^ 100 12.5 (2.6) (17.2) 11.75 12.00
Brimbank Shopping Centre, VIC 100 160.0 1.1 0.7 7.75 7.75
Broadmeadows Shopping Centre, VIC 100 325.0 (5.9) (1.8) 7.25 7.50
Chatswood Chase Sydney, NSW^ 100 845.0 32.2 4.0 5.75 5.75
Clifford Gardens Shopping Centre, QLD 100 160.9 3.0 1.9 7.75 7.75
DFO Essendon, VIC 100 134.0 0.3 0.2 7.75 7.75
DFO Moorabbin, VIC 100 102.0 0.3 0.2 8.25 8.25
DFO South Wharf, VIC 50 177.5 0.5 0.3 7.75 7.50
Elizabeth Shopping Centre, SA 100 361.0 (7.1) (1.9) 7.00 7.00
Emporium Melbourne, VIC 50* 325.0 (59.4) (15.5) n/a n/a
The Entertainment Quarter, NSW 50 33.2 (1.2) (3.4) 10.00 10.00
Forest Hill Chase, VIC^ 100 278.5 (7.8) (2.7) 7.25 7.25
Grand Plaza Shopping Centre, QLD 50 171.0 0.5 0.3 6.75 6.75
Northgate Shopping Centre, TAS^ 100 88.5 (3.1) (3.4) 8.25 8.25
QueensPlaza, QLD^ 100 570.0 17.9 3.2 5.75 5.75
Rockingham Shopping Centre, WA 50 266.8 14.6 5.8 6.50 6.25
Roxburgh Park Shopping Centre, VIC 100 95.0 (5.4) (5.4) 8.00 7.75
Runaway Bay Shopping Centre, QLD 50 118.9 0.9 0.7 7.25 7.25
Total 4,808.3 (20.7) (0.4)
^ Valuation as at 31 May 2013, all other valuations are as at 30 June 2013.
* CFX owns 33% of the Myer Bourke Street department store and 50% of the Emporium Melbourne development project on Lonsdale Street. Note the
reported valuation above refers to Emporium Melbourne only as the Myer department store was not externally valued in the current round.
Mr Michael Gorman, Fund Manager of CFX, said: “There is increasing transactional evidence for a range of
shopping centre types. This demonstrates that there is solid investor appetite for quality Australian shopping
centres at current book values.”
Good progress has been made on the construction of the Emporium Melbourne project, with the final retail
floor slabs now being poured and services and other trades well advanced on the floors below. Despite this
progress, we have not been able to recover all the previously-advised lost time, and consequently we are now
aiming to complete the redevelopment around the end of the first quarter of calendar year 2014. The delay has
resulted in a $15 million (CFX share) increase in forecast project costs, largely reflecting the additional interest
1
Unaudited figures.

costs to be incurred, bringing the revised total forecast project cost to $590 million (CFX share). Leasing has
progressed significantly in recent months, with approximately 75% of income now secured. However, in light of
the subdued retail leasing market, we have revised down our income forecasts. The combination of lower
income and increased costs has resulted in a revised target year-one yield on costs of approximately 5%. The
adjusted project metrics have now been factored into the independent valuation, resulting in a writedown of
$59.4 million of the project book value being reported.
Mr Gorman said: “Notwithstanding the tough leasing environment, we remain excited about the world class
retail destination that we are creating in the heart of Melbourne, widely regarded as Australia’s most fashion
conscious city. The project will incorporate a range of concept and large flagship stores housing some of the
world’s best international and luxury brands. We are focused on having the project fully leased on opening.”
Excluding the impact of the Emporium Melbourne valuation, the portfolio had a modest uptick in asset values.
Key assets Chatswood Chase Sydney and QueensPlaza showed solid increases driven by income growth,
and Rockingham Shopping Centre was driven by a combination of income growth and a tightening in the
capitalisation rate. Partially offsetting these gains were decreases at Forest Hill Chase and Elizabeth Shopping
Centre driven by softer income assumptions, and Broadmeadows Shopping Centre driven by a softening in
the capitalisation rate. Generally speaking the Victorian assets were negatively impacted by more
conservative outgoings assumptions based on the impending Victorian Fire Services Levy and changes in
land tax calculations.
As a consequence of these valuations, the portfolio weighted average capitalisation rate 2 tightened slightly to
6.43% at 30 June 2013 from 6.44% at 31 December 2012. CFX’s total assets are estimated to be $8.6 billion
at 30 June 2013, up from $8.5 billion as at 31 December 2012, predominantly reflecting development
expenditure.
Net Tangible Asset backing per stapled security is expected to decrease slightly to $2.04 at 30 June 2013
from $2.05 at 31 December 2012. Gearing 3 is expected to be around 28.9% at 30 June 2013, up from 27.9%
at 31 December 2012, largely as a result of development expenditure and remains comfortably within CFX’s
target gearing range of 25% to 35%.
2. Excluding DFO retail outlet centres, Myer Melbourne and 15 Bowes Street, Woden.
3. Gearing equals total drawn debt to total assets. For this calculation total assets exclude the fair value of derivatives.
For further information please contact:
ENDS
Michael Gorman
Angus McNaughton
Fund Manager
Managing Director, Property
CFS Retail Property Trust Group
Colonial First State Global Asset Management
Phone: +612 9303 3448 Phone: +612 9303 3765
Email: mgorman@colonialfirststate.com.au
Email: amcnaughton@colonialfirststate.com.au
Investor and media contacts:
Penny Berger
Troy Dahms
Head of Investor Relations and Communications
Investor Relations and Communications Manager
Colonial First State Global Asset Management
Colonial First State Global Asset Management
Phone: +61 2 9303 3516 or +61 402 079 955 Phone: +61 2 9303 3491 or +61 412 055 996
Email: pberger@colonialfirststate.com.au
Email: tdahms@colonialfirststate.com.au
About CFS Retail Property Trust Group (CFX)
CFX is a retail sector-specific Australian Real Estate Investment Trust (A-REIT) which invests in high quality
retail assets including super-regional, regional and sub-regional shopping centres and DFO retail outlet
centres across Australia. CFX is managed by entities within CFSGAM Property on behalf of more than 17,000
investors from 23 countries with a portfolio comprised of 30 assets and a total asset value estimated at
$8.6 billion at 30 June 2013.
About CFSGAM Property
CFSGAM Property is the specialist property division of Colonial First State Global Asset Management, and is
one of the largest real estate fund managers in Australia with $17 billion in funds under management.
CFSGAM Property offers a fully integrated real estate investment platform including investment management,
asset management, development management, origination and execution. CFSGAM Property manages a
suite of wholesale investment products, as well as three listed real estate investment trusts in Australia and
New Zealand.
2