Trust update

The property continues to perform well both in terms of income and retailer performance. In the June quarter, retail sales increased 18 per cent compared to the previous corresponding period. The material increase in retail sales coincided with the completion of the Woolworths refurbishment.

The trust is due to expire in December 2010. We have written to investors regarding extending the trust for 12 months to fully explore all options to extract the best value from the property for the benefit of investors.

Given the over-supply of comparable property on the market, there is considerable risk that an acceptable price or even a sale may not be achievable at this time. An extension of the trust term would enable the trust to fully explore options to extract the best possible value for investors, either by allowing time for market conditions to improve, or by restructuring the trust to avoid a sale in the current sub-optimal market conditions.

Any such restructure would require separate approval at a meeting of investors.

Distributions and redemptions

The annualised distribution of the trust remains unchanged at six cents per unit. The trust is closed to redemptions.

Debt

The trust has a single loan facility with the Bank of Western Australia (“Bankwest”) that is due to expire in December 2010, in line with the trust’s expiry date. We have commenced discussions with the lender regarding a possible extension in line with any corresponding extension of the term of the trust.

Leasing

Management has secured a replacement tenant, Scoop, a well established local media business, for 601 square metres of office space on the mezzanine level. The prior tenant vacated at the end of its tenancy in October 2010. The lease accounts for ten per cent of the trust’s income and, together with the upcoming debt refinancing, will place the trust in a position to consider increasing distributions once payment of rent commences – provided the term of the trust is extended.

Capital expenditure

No capital expenditure was incurred or committed during the six month period to 30 September 2010.

Asset values

The property was independently at valued at $26.5 million as at August 2010. This is a $2.5 million improvement on the 30 June 2010 value of $24 million.