Chadstone set to grow again
Shopping centre giant Vicinity Centres has flagged yet another expansion of Melbourne’s massive Chadstone Shopping Centre, that it owns with billionaire John Gandel, with another tower and even residential apartments potentially in the mix.
Chief executive Grant Kelley says Chadstone remains Australia’s number one retail asset for the 18th consecutive year, with more than $2.2 billion in sales and 24 million visitors, annually.
“Chadstone is also an expanding mixed-use destination, with three office buildings on site, the recently opened Hotel Chadstone, and the potential for more commercial and residential development in the future,” he says.
Commercial Insights: Subscribe to receive the latest news and updates
The five-star Hotel Chadstone opened earlier this month with the $130 million building operated under the MGallery by Sofitel brand, featuring 250 rooms, two restaurants, conference facilities, a ballroom, a rooftop indoor swimming pool, and a wellness retreat and day spa.
The company said at its annual general meeting on Thursday its strategy of focusing on luxury goods and also advancing mixed-use developments on key properties was on track.
It is funding the moves by selling off unwanted shopping centres and this month offloaded close to $200m worth of such assets as part of efforts to sell off slower growth properties and set itself up to combat the rising tide of e-commerce.
Buying top assets
Chairman Peter Hay says the company has sold off $3.3 billion worth of shopping centres over the last several years and poured the proceeds back into buying top assets and overhauling other centres, as well as stock buy backs.
Kelley says there are redevelopments underway at Emporium Melbourne and it is planning a $1bn overhaul of Chatswood Chase Sydney. The company also revealed a series of retail and mixed-use developments were advancing.
At Melbourne’s Box Hill, Vicinity will consolidate its retail holdings above the train station, freeing up the remaining parcel for a high rise development of up 350,000sqm.
At Victoria Gardens in Richmond the company will develop a non-retail tower on its expanded site, and will also bolster the retail centre.
In Sydney, the company’s Bankstown Central has plans for a mixed use project of about 300,000sqm.
In Queensland, Vicinity is also investigating retail and mixed-use development options for QueensPlaza and Buranda Village in Brisbane.
The company kept its Funds From Operations guidance for this financial year at 17.6 to 17.8 cents per security. The distribution payout ratio is expected to be at the upper end of the target range of 95% to 100% of adjusted FFO.
This article originally appeared on www.theaustralian.com.au/property.
