Macquarie DDR Trust, expected to list on the Australian Stock Exchange by year's end, will launch with an 81% interest in a $730-million portfolio of 11 community centers (4.8 million sf GLA) currently owned either directly by Developers Diversified or through Developers Diversified-sponsored joint ventures. Developers Diversified will retain a 14.5% effective ownership interest in the assets and MBL will own the remaining 4.5%.
Developer's Diversified will receive approximately $185 million in cash with regard to the transaction and Macquarie DDR Trust will carry approximately $374 million in debt. The interest rate for this debt will generally be structured with 80% fixed at 4.4% and 20% floating at estimated initial weighted average interest rate of 3.85%.
Developers Diversified will be responsible for all day-to-day operations of Macquarie DDR Trust properties and will receive fees for property management, leasing, construction management, acquisitions, due diligence, dispositions (including outparcel sales) and financing. The company also will receive base asset management fees and incentive fees based on the performance of the new trust.
Moving forward, Macquarie DDR Trust will have a two-year right of first offer on 20 pre-determined joint venture and wholly owned assets currently in Developers Diversified's portfolio. Macquarie DDR Trust also is expected to pursue acquisitions of additional stabilized, institutional-quality community center properties.
Macquarie DDR Trust will be governed by a board of directors that includes three members from Developers Diversified, three members from MBL and two independent members to be selected after the entity's listing on the Australian Stock Exchange, which is expected sometime in the fourth quarter.
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