One of Australia’s largest wholesale real estate funds, managed by GPT Group, has acquired a 25% stake in a Melbourne shopping centre for AUD680m (€462m).
The deal, which has been stuck at a record-breaking yield of 4.2%, gives GPT 100% ownership of Highpoint Shopping Centre, located in the inner suburb of Maribyrnong.
The AUD3.9bn GPT Wholesale Shopping Centre Fund (GWSCF) acquired the stake from Highpoint Property Group, controlled by Victorian billionaire Marc Besen.
GPT paid a 10% premium to the fund’s 30 June 2017 book value, and valuing the centre at AUD2.72bn.
The open-ended GWSCF, established in March 2007, invests on behalf of 30 investors, 80% of which are large Australian superannuation funds and the rest global institutions.
The fund, which returned 13.5% in the 12 months to June 30, already owned almost 60% of the asset.
The transaction lifts GWSCF’s ownership of Highpoint to 83.33% while the GPT Group (GPT) retains a 16.67% interest. GPT continues to manage the asset.
The premium paid reflects intense competition among some of Australia’s largest investors for what are known as ‘fortress’ shopping malls – a reference to Australian planning laws that have limited development of super regional shopping centres across the country.
Highpoint Shopping Centre houses around 470 stores, including department stores and leading international retailers. It is regarded as one of the top-performing super regional shopping centres in Australia, chalking up an annual moving turnover of almost AUD1bn.
GWSCF fund manager Brett Williams said he was pleased the fund had secured the additional stake, giving it further ownership of “a very successful, high performing asset”.
He said: “Highpoint has delivered an exceptional return of 15.1% over the past 12 months”, stressing that super prime regional centres of such calibre are rarely traded in Australia.
Having full ownership paves the way for the GPT Group to explore future expansion and development potential at the centre, which serves a catchment area of 1.3 million people.
GPT completed an AUD300m redevelopment of Highpoint in 2013, adding 25% extra space to include a fresh food market and a new Woolworths supermarket.
Settlement of the deal is scheduled for late September 2017.