Woolworths to spin off $1.4-bn shopping centres portfolio

Woolworths, Australia's largest retail chain, yesterday said that it would spin off its $1.4 billion shopping centres portfolio into a real estate investment trust in order to boost shareholders value.

The Sydney-based retailer said that it would transfer 69 shopping centres in Australia and New Zealand to a new company, Shopping Centres Australasia Property Group (SCA Property Group) and raise as much as A$506 million through a public stock offer.

Woolworths said that these centres have been independently valued to be worth around $1,406 billion by Cushman & Wakefield, Colliers International New Zealand Limited and Savills Australia.

Woolworths shareholders will receive one stapled unit in SCA Property Group for every five Woolworths shares that they hold as at 30 November 2012.

SCA Property Group will also launch a public offer of 337.3 million stapled units and raise between $425 million and $506 million to partially fund the acquisition of the shopping centres.

Shareholders will be asked to vote on the plan at the company's annual meeting on 22 November and Woolworths expects the new stock start trading on the Australian Securities Exchange 26 November.