The recently formed partnership between Scentre Group and Barrenjoey Private Capital has bought its second shopping mall in Adelaide for A$174.75m (€106m).

Scentre, which already owns a 50% stake in the centre, Westfield West Lakes, held in its listed company, exercised its pre-emptive rights to secure the half stake that was previously owned by AMP Capital before it was take over by Dexus.

The partnership, established in June, marked Scentre’s expansion into wholesale funds management when the partners bought a half interest in Westfield Tea Tree, the third largest shopping centre in South Australia, for A$308m.

The asset will be held in what is known as the West Lakes Opportunity Trust. The jointly-managed trust is looking to raise around A$83m to fund the equity portion of the acquisition.

“Ahead of Scentre Group exercising its pre-emptive rights, the Westfield West Lakes opportunity garnered strong domestic and offshore investor interest,” said CBRE’s head of retail capital markets – Pacific, Simon Rooney , who exclusively negotiated the deal, on behalf of the Dexus Wholesale Property Fund (DWPF).

He said the West Lakes transaction demonstrated the resurging investor interest in larger regional shopping centres, given that these centres had already rebased their income back to sustainable levels and are now positioned for growth.

“We’ve seen A$1.1bn in high-quality regional retail assets recently change hands, including 50% stakes in Westfield Tea Tree, Lakeside Joondalup and Claremont Quarter, with a further $1.3 billion in deals currently in play,” he said.

Rooney added that West Lakes was underpinned by the opportunity to acquire a stake in a dominant, strong performing regional shopping centre in Adelaide’s affluent northern suburbs. Major tenants report a combined A$216m in sales per annum and have a long expiry averaging 7.6 years by GLA and draws 6.6m customers annually.

“The centre offers genuine value-add potential and robust investment fundamentals, with potential buyers attracted by the quality of the asset and the long-term growth potential.The future mixed-use development potential for the property is supported by an under-utilised 20.4-hectare landmark site, strategically positioned to benefit from the adjoining WEST Development, a 36.4-hectare master-plan development set to deliver 1,300 dwellings and wider community facilities,” he said.

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