Centro Property Group has reached an agreement with its lenders on extending its $4 billion senior debt facility till the end of 2011, the listed property group said on Friday.

The agreement includes the issuance of new shares to Centro's lenders.

"The three-year debt stabilisation agreement achieves our objective of securing the long-term viability of the group, and will have the effect of maximising cash flow through the re-structuring of our debt arrangements and minimising asset sale requirements," Centro chief executive Glenn Rufrano said in a statement to the ASX.

"This debt stabilisation provides sufficient time and liquidity to navigate difficult market conditions and maintain focus on our shopping centres and the operation of the funds management business."

When Centro announced in December 2007 that it was unable to refinance a large part of its debt, its shares tumbled more than 75 per cent in a single day and it caused the entire listed property sector to collapse.

Since then almost none of Australia's listed property trusts have been able to produce positive returns.

Shares in Centro initially surged more than 37 per cent last Friday, but fell back to close 8 per cent higher at $0.13.

The announcement failed to lift sentiment in the listed property sector.

The S&P/ASX 200 A-REIT Index, which includes the 200 largest listed property funds, closed 1 per cent lower.

Over 2008, the index lost 54 per cent.