Australian retail property group Vicinity Centres intends to sell up to AUD1bn (€653.2m) of non-core assets to help fund investments in higher-yielding assets.

Vicinity said it will sell sub-regional and neighbourhood shopping centres and reinvest the proceeds into value-accretive development opportunities.

The move is part of the firm’s plan to focus on ongoing portfolio enhancement and delivering superior income and sustainable long-term capital growth for securityholders, it said.

Grant Kelley, the CEO and managing director, said since the merger in 2015, the company has sold AUD1.9bn of assets.

These proceeds were used to reduce debt and then reinvested over time into substantially higher returning asset acquisitions and developments, Kelley said.

“Building on these successes, and following an extensive review of our portfolio, it is clear that we need to focus our resources on creating destinations that provide market-leading shopping, dining and entertainment experiences,” Kelley said.

Kelley said the proceeds from the disposals will be reinvested into existing developments  as well as additional value-accretive development opportunities.

“There are other assets in the portfolio to which the market is not ascribing, in our view full value. We are working through options as to how to deal with these, with a further update anticipated at our annual results briefing in August.”

Vicinity has appointed JLL as its real estate advisor and coordinator of the asset sales process working with Macquarie Capital as its corporate advisor on the asset sales program.

 

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