Lendlease-managed Australian Prime Property Fund Retail (APPF Retail) is selling a shopping centre in Victoria to a DeGroup for around A$136.5m (€88m).

The CS Square shopping mall houses three supermarkets and discount department stores and is located in Caroline Springs, a suburb in Melbourne’s west.

Colin DeLutis, chairman of DeGroup, said his firm had been following the performance of CS Square for a long period of time and felt it was a “perfect fit” for his company’s portfolio of convenience and service-focused centres.

“The defensive nature of the asset is further strengthened due to its significant proportion of income derived from national businesses and, importantly, a centre WALE in excess of seven years,” he said.

“We also see a major opportunity to take advantage of current market dislocation in pricing between sub-regional yields and bond rates, which we expect to continue for some time to come.”

Anne MacSporran, fund manager of APPF Retail, said: “The strategic divestment of CS Square represents a strong result for investors, especially in light of recent market conditions.”

She said the outlook for Australian retail remained positive, with sales stabilising post-pandemic.

“With the sector undergoing an evolution in response to changing consumer trends, APPF Retail is progressing its urban growth centre strategy, positioning our core assets to capitalise on mixed-use opportunities which will cater to future lifestyle, technology and shopping needs,” she said.

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