SYDNEY Australian conglomerate Wesfarmers (WES.AX) is considering at creating an unlisted real estate trust valued at about $700 million and selling a stake to investment funds, two sources said, joining rival retailers who are spinning of real estate assets.
Wesfarmers is reviewing its Coles supermarket property portfolio and may put 25 shopping centers into a trust, the sources with direct knowledge of the plan said, confirming a report in the Australian Financial Review newspaper.
The sources declined to be named as the plan is not public yet. A Wesfarmers spokesman could not be reached immediately for comment.
The sources said Wesfarmers would hold a stake in the trust and manage the shopping centers, giving flexibility to Coles, which is the second-largest supermarket chain in Australia.
Wesfarmers is being advised by Royal Bank of Scotland (RBS.L), Goldman Sachs (GS.N) and Jones Lang Lasalle (JLL.N), the sources said. They said the review could take a couple of months, but declined to specify a deadline.
The move by Wesfarmers, which spans resources, financials, home improvement and chemicals, follows a decision by rival Woolworths (WOW.AX) to spin off shopping centers worth A$1.4 billion to a listed entity called SCA Property Group.
Department store David Jones DJS.AX is also reviewing its property assets.
Coles had 741 supermarkets, 785 liquor stores, 93 hotels, 620 convenience stores in 2011, according to its website, though a large part of its property portfolio is leased.
($1 = 0.9776 Australian dollars)
(Reporting by Narayanan Somasundaram; Editing by John Mair)