Wesfarmers Ltd. (WES), Australia’s second biggest retailer, is seeking institutional partners to co-invest in about A$700 million ($717 million) of shopping centers held by its Coles unit.
The Perth-based company wants to finalize its real estate strategy by the end of 2012, said Simon Rooney, Sydney-based head of Australian retail investments at broker Jones Lang LaSalle Inc., which is advising Wesfarmers. The group is seeking investments in about 25 malls, he said.
Westfield Group (WDC), Centro Retail Australia (CRF) and Goodman Group (GMG) are among property companies that have established partnerships with investors including the Canada Pension Plan Investment Board and the Industry Superannuation Property Trust to free up capital to fund developments and new ventures. Woolworths Ltd. (WOW) this month said it plans to spin off 69 stores and shopping malls worth A$1.41 billion into a real estate investment trust and offer existing investors shares in the new trust.
Unlike Woolworths, Wesfarmers won’t create a separate entity, as it wants to retain “a degree of control, which will give them the flexibility to develop the assets further in the future and or embark on refurbishments or expansions,” Rooney said by telephone today.
Alan Carpenter, a Perth-based spokesman for Wesfarmers, declined to comment.
The Australian Financial Review reported Wesfarmers’ plan today, without citing anyone. Wesfarmers has enlisted investment banks Goldman Sachs Group Inc. and Royal Bank of Scotland Group Plc to advise the company, the newspaper said.
Wesfarmers reported an 11 percent increase in profit in the year ended June after price cuts, store relocations and increases in staff numbers at Coles supermarkets boosted sales. Its shares have climbed 18 percent this year, compared with a 11 percent gain in the benchmark S&P/ASX 200 index.
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