This article is from the Australian Property Journal archive
LEND Lease could make a bold move by spending more than $500 million to buy out GPT's interests in three retail properties that it does not already own.
Industry sources have told Australian Property Journal that the Lend Lease managed Australian Prime Property Fund Retail has mulled over acquiring GPT’s 50% stakes in the Erina Fair shopping centre in NSW’s Central Coast; the Macarthur Square in south western Sydney and the Sunshine Plaza in Brisbane.
GPT and its flagship GPT Wholesale Shopping Centre Fund are currently marketing around a dozen retail property assets worth in excess of $2 billion.
Last month, insiders told Australian Property Journal that Lend Lease has likened GPT’s capital raising to the Singapore Government’s GIC Real Estate and mooted $2.5 billion plus asset sales as “the children selling off the family jewels”.
And this month, Stockland has also made a move for GPT by buying a stake in the company.
Sources said rather than see the three centres fall into the hands of rival property groups, Lend Lease’s APPF Retail could make an offer for the Erina Fair; Macarthur Square and Sunshine Plaza assets.
“If those retail centres fell into the hands of rival property groups like Stockland and Westfield, there is likely to be a dispute and headaches over who becomes the property manager of those assets.
“It’ll be déjà vu all over again for Lend Lease. Remember a few years ago (September 2005) Lend Lease took GPT to court because GPT wanted to sell a 25% stake in Sunshine Plaza to Westfield which wanted to replace Lend Lease as the property manager.
“Lend Lease did not want to loose the management (of Sunshine Plaza) and argued that APPF had first rights to buy property under their joint ownership agreement.
“But who could blame them, when GPT split from Lend Lease and carved up the Woden Plaza and Penrith Plaza retail centres to Westfield, they (Lend Lease) were cut out of the deal and Westfield replaced them as the property manager,” sources added.
“And the Lowy’s have lately been talking up buying retail property assets and they are cashed up to do it.
“GPT’s Australian retail properties are performing and will be a healthy addition to any portfolio,” sources said.
In September this year, the Australian Financial Review reported GPT had agreed to sell a 50% slice in the $225 million Dandenong Plaza shopping centre in south eastern Melbourne to German fund manager Hamburg Trust.
GPT bought out APPF Retail’s stake in Dandenong Plaza in 1999 as well as buy a 50% stake in Macarthur Square in a packaged deal worth $184.7 million.
Erina Fair is a 107,700 sqm centre managed by Lend Lease, it was valued at $426 million as at June 30. The centre boasts an annual turnover of $574.6 million and occupancy is at a high of 98.9% and the earliest major lease expiry is in July 2013.
The second property, Sunshine Plaza is also managed by Lend Lease and is located in Maroochydore on the Sunshine Coast. The centre has 92,900 sqm of space and has occupancy rate of 99.8%. The centre boasts an annual sales turnover of $474.7 million and was independently valued at $366.3 million as at June 30.
Finally the third asset, Macarthur Square in south western Sydney is owned by the GPT Wholesale Shopping Centre Fund. The 95,200 sqm centre was valued at $411.5 million as at December 2006. The centre recently finished a $220 million redevelopment.
The total half stake in the three assets is worth around $676.20 million.
GPT has yet to sell any of its non core assets, recently the group said the global credit crisis has made it difficult to conclude transactions and negotiations to offload these properties are likely to continue into next year.
Australian Property Journal
