By Greg Peel

In the lazy, crazy, hazy days leading up to 2007, money was cheap, property values were rising, and gearing levels never seemed an issue. There was a prevailing attitude of get on or miss out, and such an attitude provided the impetus for copy-catting under skies of eternal upside.

So it was that Babcock & Brown, for example, set about trying to emulate Macquarie Bank. ABC Learning discovered the government would subsidise unimpeded borrowing against the education of small children, and Centro fancied itself as the new Westfield. Westfield was the king of the quality shopping mall in both Australia and the US, and for Centro it was just a matter of snapping up any old mall in the American suburbs and a ticket to Frank Lowy-dom was a given.

That is, until the credit crunch began to bite late in 2007, and suddenly 80% gearing ratios looked pretty uncommercial against dubious assets as credit spreads widened by the hour. So came the spectacular collapse of ABC, and Centro, and eventually B&B, along with a devastating re-rating of all Australian listed REITs and infrastructure funds. The Christmas of '07 was not a happy one in listed fund land. And Lehman's demise was still another nine months off.

Fast forward to this week, and while ABC Learning is now dust, as is the B&B parent company (some funds have managed to be reinvented after massive dilution), Centro has been hanging in there grimly all this time. After much restructure, this week saw the initial listing of the new Centro Retail Australia ((CRF)), effectively an amalgamation of the old Centro Property (CNP) and Centro Retail (CER).

Unlike the old model, notes UBS, CRF is a 100% Australian focused, 100% retail property REIT with $4.4bn of directly owned assets, 27 syndicates worth $2.6bn under management, and another $0.5bn of co-investments. And as JP Morgan puts it, "Enough of the corporate wreckage has been removed to reveal the quality underlying assets".