Macquarie launches massive capital raising for US property trust

Macquarie Bank and the US-based Developers Diversified Realty Corporation (DDR) are seeking A$550 million from investors, in the largest Australian property capital raising this year, to launch a property trust specialising in North American community shopping centres.

The new trust, to be called the Macquarie DDR Trust (MDT), will be jointly listed on theAustralian Stock Exchangeby late November, and will have an 81 per cent share in a diversified portfolio of 11 shopping centres in the United States valued at US$744.5 million.

With the offer to be jointly and fully underwritten by Macquarie Equities and UBS, MDT plans to draw 75 per cent of the capital from institutional investors and 25 per cent from the retail sector.

Macquarie Bank, which will manage the trust, and DDR, manager of the assets, will own the remaining 19 per cent of the seed assets, and will jointly own the responsible entity, Macquarie DDR Management Limited (MDML).

Macquarie’s head of real estate, North America, Mark Baillie says, “The management of the trust combines both Macquarie’s funds management and DDR’s asset management expertise - bringing together ‘best of breed’ management platforms from the Australian and US markets.”

Macquarie Bank deputy managing director and chairman of MDML Richard Sheppard says the proposed listing of MDT continues Macquarie Bank’s strategy to diversify and expand its range of specialist listed funds and to deliver strong investor returns.

The new trust will be the sixth sector-specific listed property trust managed by Macquarie Property and its associates, taking total assets under management to more than A$10 billion.

The retail offer for MDT units closes on 14 November, with forecasted annualised returns of 9 per cent on the issue price and distribution of 5.48 cents per unit for the period to 30 June 2004.