Australian real estate trust SCA Property Group had announced it had AUD70 million or USD62 million in debt capacity. These funds, according to the trust spun off from Woolworths Ltd, the supermarket chain, can be used to fund plans to purchase shopping centers for future business.
The company's ratio to debt to assets would rise to nearly 33% in a year upon its acquisition of two shopping centers being developed by Woolsworths. This is an increase from 28.9% as of June 30, according to CEO Anthony Mellowes through a telephone interview. He added that under existing debt facilities of the company, the gearing or the debt to assets ratio can reach as high as 40%.
In June, SCA Property agreed to purchase seven neighborhood centers located in Victoria and Queensland for AUD135.8 million. Part of this purchase amount was funded through an AUD90 million institutional equity fund raising. The company currently owns AUD1.5 billion in shopping centers, mostly supermarkets. The new developments would focus on purchase of existing shopping centers instead of building new ones from scratch.
Mellowes said, "Most of the neighboring shopping centers, which we would buy, are normally in the range of AUD20 million to AUD40 million for one. If we do a portfolio, we would have to go out and raise more capital."
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