Stockland sells Bathurst shopping centre at a discount
Stockland has offloaded two shopping centres, one in Bathurst in regional NSW and the other in Queensland’s Caloundra, for combined proceeds of $113.1 million.
The sales were struck at a 5.3% discount to their combined book value in keeping with a run of smaller shopping centre sales by real estate investment trusts at discounts to book values.
Both Vicinity Centres and the Charter Hall Retail REIT have sold centres at a below book values but investors have welcomed their exits from centres that do not fit their strategy and using capital for larger plays.
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The investment arm of Moelis picked up the Bathurst centre for about $90 million and will tap its wealthy clients for equity.
The 19,570sqm subregional shopping centre is anchored by Target, Big W and Woolworths, which comprise about 48% of the income, and has about 35 specialty stores.
The centre had annual sales of $103.76 million and a weighted average lease expiry of more than eight years. It has about 520 car parks and is well linked to other centres in the town.
Sam McVay of McVay Real Estate brokered the off-market sale but did not comment.
In Queensland, Stockland is selling Stockland South in Caloundra for about $22 million but will keep its larger Stockland Caloundra Shopping Centre, which has a Coles, a Kmart and 50 specialty stores.
Stockland chief executive Mark Steinert. Picture: Hollie Adams.
Stockland has been under pressure to offload parts of its retail property holdings and also wrote down parts of its southeast Queensland portfolio this year.
Stockland managing director Mark Steinert says the sales are part of the group’s strategy to shift towards its commercial holdings.
“The divestments of Stockland Bathurst and Stockland South align with our strategy to release capital for reinvestment and reshape the commercial property portfolio,” he says.
Steinert says this includes reweighting the national workplace and logistics portfolio to more than 25 per cent of total assets, primarily by progressing its $600 million workplace and logistics development pipeline.
“These divestments will also contribute to our on-market buyback of up to $350 million of Stockland securities,” he says.
The asset sales lift Stockland’s commercial property sales to $448 million over the past 15 months and Mr Steinert said the group was also on track to meet its current retail divestment targets, with a further $290 million expected to be sold in the next 12-24 months.
“This strategy is helping to drive centre performance with foot traffic up 2.5% to July and specialty sales up by 4.3% to $9313 per square metre to September on average across our portfolio,” he says.
Shaw and Partners analysts see Stockland as cheap but say sentiment will work against the stock until there is positive newsflow, which may not come until the February 2019 season.
This article originally appeared on www.theaustralian.com.au/property.
