One of Australia’s oldest wholesale funds, the Lendlease-managed Australian Prime Property Fund Retail (APPF Retail), is offering its share in a shopping mall in South Australia to meet redemption requests from investors.
Lendlease has appointed agents JLL and Colliers International to market its 50% stake in Westfield Marion. The major regional centre is expected to fetch more than A$700m (€443m).
The fund’s co-investor, Scentre Group, holds its half share on its book at A$738m. The listed company is believed to have pre-emptive right to the APPF–Retail’s share of the centre.
Although there are currently a large number of shopping centres on the market, the agents said the core nature of Westfield Marion was likely to attract strong interest from both local and offshore institutions such as pension funds.
Westfield Marion ranks among the top 20 Australian centres in terms of sales productivity and is listed as the 13th largest centre for annual turnover.
Agents said recent transactions of major regional centres include Westfield Eastgardens in Sydney, Indooroopilly in Brisbane and Highpoint in Melbourne have changed hands at yields of 4.25% or lower.
The APPF Retail, established in 1989, controls 11 of Australia’s best shopping malls, valued at A$5.7bn.
The fund has almost 60 investors and some of these took the opportunity of a seven-yearly liquidity window, which occurred last year, to adjust their own exposure to the fund and weighting the retail sector in general.
Lendlease’s CEO, Steve McCann, was asked about the level of redemptions during the company’s earnings calls in February, and he said then that the company would meet those requests.
Industry sources said the sale of Westfield Marion is expected to satisfy some of the redemption requests, which could be as much as A$2bn.
