Vicinity Centres has bought a 50% interest in a regional shopping centre in Western Australia from Australia’s Future Fund for A$420m (€255m).
The LendLease-managed Australian Prime Property Fund – Retail (APPF-R) owns the other half stake in the Lakeside Joondalup asset. APPF-R jointly bought the centre with the Future Fund in 2010 for A$475m and they spent a further Å$330m to redevelop it.
Vicinity’s CEO and managing director, Peter Huddle said: “The acquisition of Joondalup, together with the forthcoming redevelopment of Galleria and sale of four non-strategic assets in Western Australia, reflects our deliberate strategy to recycle and redeploy capital in order to right-size our investment and strengthen our asset portfolio in Western Australia.”
He added Vicinity had also secured the property and retail development management rights for Joondalup, which provided the opportunity to utilise the group’s retail management platform to drive asset performance, whilst earning additional fee income.
The site offers flexibility and scale for both short-term development and to create value in the long term through a mixed-use scheme, which would capitalise on the state government’s plan to turn Joondalup into a second CBD after Perth, said Simon Rooney, CBRE’s head of retail capital markets.
Rooney who acted on behalf of the Future Fund to sell the stake, said: “The acquisition marks the re-entry of REITs [real estate investment trusts] into Australia’s regional shopping centre investment market. The Joondalup transaction is the first such acquisition since Scentre Group’s A$720m acquisition of a 50% stake in Westfield Eastgardens in Sydney in mid-2018.”
The centre, which generates an annual sale of A$800m, is the single largest retail asset sale this year.
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