02 Dec 2021

Establishment of $750m metro convenience retail JV with GIC

Shopping Centres Australasia Property Group RE Limited ABN 47 158 809 851 AFS Licence 426603 as responsible entity of the Shopping Centres Australasia Property Retail Trust ARSN 160612788 and as responsible entity of the Shopping Centres Australasia Property Management Trust ARSN 160612626 Level 5, 50 PITT ST, SYDNEY NSW 2000 SCAPROPERTY.COM.AU 2 December 2021 ASX A NNOUNCEMENT SCA Property Group announces establishment of $750m metro convenience retail JV with GIC SCA Property Group (ASX: SCP) ( “ SCP ” or “the Group” ) is pleased to announce the establishment of a new Joint Venture (“JV”) with an affiliate of Singapore - based GIC ( “ GIC ” ) that will invest in established m etro politan convenience retail centres across Australia. The new unlisted vehicle, to be known as the SCA Metro Convenience Shopping Centre Fund , wil l be seeded with seven assets from SCP ’s existing portfolio totaling $28 4. 5 m at a weighted average capitalisation rate of 4.84% (refer Annexure 1 ) . Subject to FIRB approval, GIC will hold an 80% equi ty interest in the JV . SCP will hold the remaining 20% equity interest and will be the investment manager of the JV. The strategic rationale for SCP for the creation of the JV is compelling : • Establishment of a long - term strategic partnership with a high quality and globally recognised capital partner in GIC ; • Ability to expand and accelerate participation in the convenience - retail sector, with the JV focused on neighbourhood assets in lower yielding metropolitan locations . The investment criteria of t he JV ensures th at there is limited conflict with SCP ’s balance sheet activities , with the JV to have a first right over neighbourhood assets in the Sydney and Melbourne metropolitan areas until the target $750m of asset level has been achieved ; • Increasing third party assets under management and diversification of income streams, aligning with SCP’s core strategy which is to generate defensive, resilient cash flows to support secure and growing long term distributions to unit holders . The establishment of a long - term strategic partnership with GIC represents an exciting opportunity for SCP to pursue opportunities on an expanded basis in the convenience retail sector . This initiative further confirm s SCP’s leading position in the ownership and management of c onvenience - based retail shopping centres. Financial impacts The pricing of the initial seed portfolio represents a ~ 9.3 % premium to SCP’s 30 June 2021 valuations. SCP will receive market - based fees for funds , asset and property management services provided to the JV. Proceeds from the sale of the seed portfolio assets will initially be used to reduce debt and provide capacity for future acquisition and development opportunities. SCP aims to redeploy the proceeds from the sale of the Shopping Centres Australasia Property Group RE Limited ABN 47 158 809 851 AFS Licence 426603 as responsible entity of the Shopping Centres Australasia Property Retail Trust ARSN 160612788 and as responsible entity of the Shopping Centres Australasia Property Management Trust ARSN 160612626 seed portfolio into higher yield and higher return assets within the next 12 months. There is no change to our full year FY22 AFFO guidance of 15.0cpu as previously advised. Conditiona lity The establishment of the JV is conditional on GIC obtaining necessary FIRB approval s and on securing appropriate financing for the JV . Expected close date for the establishment of the JV is 31 January 2022 . This document has been authorised to be re leased to the ASX by the Board of SCP. ENDS Media, Institutional investor and analysts, contact: Mark Fleming CFO SCA Property Group (02) 8243 4900 Unit holder s should contact SC P Information Line on 1300 318 976 with any queries. Shopping Centres Australasia Property Group RE Limited ABN 47 158 809 851 AFS Licence 426603 as responsible entity of the Shopping Centres Australasia Property Retail Trust ARSN 160612788 and as responsible entity of the Shopping Centres Australasia Property Management Trust ARSN 160612626 Annexure 1 : Seed Portfolio Assets Asset City Book Value June 2021 ($m) Sale Price Nov 2021 ($m) Premium to Book Value (%) Cap Rate (%) 1 Berala Sydney 33.3 37.0 11.1% 4.25% 2 Clemton Park Sydney 63.1 69.0 9.4% 5.00% 3 Coorparoo Brisbane 42.7 45.8 7.3% 5.00% 4 Epping North Melbourne 34.5 35.0 1.4% 5.00% 5 Highett Melbourne 32.9 36.5 10.9% 4.75% 6 Walkerville Adelaide 29.3 33.7 15.0% 4.75% 7 Wyndham Vale Melbourne 24.5 27.5 12.2% 5.00% TOTAL 260.3 284.5 9.3% 4.84%
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