Vicinity Centres sells $841m shopping centre portfolio
Vicinity Centres has offloaded four shopping centres in Victoria and Queensland – including Forest Hill Chase and Toombul – to Blackstone and Mirvac for $841.4 million.
The sale of the quartet of retail assets is the latest move in Vicinity’s asset divestment program, and follows its $85 million sale of Indooroopilly Central in Queensland last week.
American investment firm Blackstone took three of the malls, paying $613.3 million for Forest Hill Chase Shopping Centre and Brimbank Shopping Centre in Victoria, and Clifford Gardens in Queensland, while Mirvac grabbed Toombul in Queensland for $228.1 million.
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Vicinity chief investment officer Michael O’Brien says the latest deals will free up capital, which will be used in the short-term to repay debt.
Toombul Shopping Centre has been sold to Mirvac.
“Over time, this capital will be reinvested into value-accretive development and acquisition opportunities, further enhancing the quality of our portfolio,” O’Brien says.
Vicinity last week announced it will develop Australia’s fifth Direct Factory Outlets complex at Perth Airport, pouring $72.5 million into the project.
The portfolio sale was negotiated by JLL’s Simon Rooney, who says the result confirms Blackstone’s place as a key foreign player in the Australian commercial property market.
“2015 was the highest year of offshore investment into Australian retail property, with over $2.4 billion being sold to foreign investors,” Rooney says.
“Blackstone has been a major driver of this capital inflow in 2015, but we are also now seeing strong interest from Singaporean investors and European insurance firms and pension funds.”
Clifford Gardens in Queensland has been sold as part of Vicinity Centre’s $841.4 million portfolio.
The four shopping centres were sold at a 1% discount to their combined book value on December 31 last year and represented a weighted average capitalisation rate of 7%.
Vicinity Centres CEO Angus McNaughton says the company’s asset sell-off is on track.
“This major transaction, the second in our divestment program of approximately $750 million to $1 billion of assets, is another strong outcome for Vicinity,” McNaughton says.
“In a little over three months since we started marketing the first tranche of our divestment program, we have made substantial progress in reshaping the portfolio and have achieved this at favourable pricing with transactions agreed totalling $926.4 million.”
