CFS Retail acquires 4 DFOs in Sydney and Melbourne
Real estate investment firm CFS Retail Property Trust (ASX: CFX) said on Friday that it has sealed a deal with Austexx Proprietary Ltd to purchase its four direct factory outlet (DFO) centres for $498 million.
CFS Retail said that the acquisition of the four DFO centres, DFO Homebush in Sydney and DFO Essendon, DFO Moorabbin and DFO South Wharf in Melbourne, would be funded by a fully underwritten $540 million institutional unit placement, with an additional unit purchase plan to be offered for retail investors.
CFS Retail fund manager Michael Gorman said that the company is upbeat on the prospect of its new investment in a sector that he characterised as "an increasingly important yet immature retail format and sub-sector in Australia."
Mr Gorman added that the transaction was all completed without any major impact on CFS Retail's balance sheet, which has maintained its solid standing following the acquisition of the four DFO centres, now representing a retail sub-sector that has been experiencing considerable growth lately.
The company said that investments made on the four DFO centres were based on their strong trading centres with proximity to important arterial roads plus the outlets' well-established levels of brand recognition.
The new acquisitions, according to CFS Retail, would upgrade its existing portfolio to a total of 29 property holdings that easily lead to a value of $8.105 billion though the investment firm clarified that the DFO centres would be reflected on the company's earnings report from financial 2012.
CFS Retail said that the takeover deal would be largely funded by new issues from institutions at $1.86 per unit, discounted by 4.6 percent from the $1.95 September 21 trading, en route to a total new issue fund of $540 million, with up to $10 million additional funds to be raised from retail investors.