This article is from the Australian Property Journal archive
SHOPPING mall owner Vicinity Centres (ASX:VCX) has capped off 2024 with asset sales totalling $457 million, already surpassing its original divestment target for FY25 by over $200 million.
The transactions, which include the sale of stakes in three non-core retail properties, highlight the continued recovery in retail transactions over 2024.
Vicinity has sold a 50% interest in South Australia’s Elizabeth City Centre to petrol king Nick Andrianakos’ Nikos Property Group for $170 million.
Vicinity’s CEO and managing director Peter Huddle said the deal will further strengthen the partnership with the Nikos Property Group.
The partnership, which already manages Broadmeadows Central in Victoria and Colonnades in South Australia, will further solidify with this transaction.
The Elizabeth City Centre divestment, which is expected to settle on June 30, 2025, is part of Vicinity’s ongoing strategy to optimise its portfolio.
In addition, Vicinity has offloaded its 50% stakes in two New South Wales assets in Roselands and Carlingford Court, for a combined $287 million, which are expected to settle in February and April 2025 respectively.
CBRE’s head of retail capital markets – Pacific, Simon Rooney exclusively negotiated the sale of Roselands and Carlingford Court. The remaining interests in both shopping centres are owned by the Sydney-based JY Group.
The proceeds, reflecting a blended premium of over 5% to book values, will enhance Vicinity’s balance sheet by reducing gearing by 230 basis points.
“With important developments in progress at Chadstone and Chatswood Chase and following the acquisition of Lakeside Joondalup in Western Australia in August 2024, we set a target of $250 million of asset divestments in FY25.
“Since then, we have been pleased with the level of interest in, and pricing offered for a number of our retail assets. Consequently, we have exceeded our initial divestment target by more than $200 million. On a standalone basis, the $457 million of proceeds from asset sales will reduce gearing by 230 basis points,” Huddle said.
Retail investment tailwinds
The transactions come amidst ongoing recovery in Australia’s retail investment sector, with investors continuing to pile into the sector.
As exclusively reported by Australian Property Journal, Barings has paid $74 million to buy the Joondalup Square centre from Arise Developments, in the biggest large format retail transaction of 2024.
It was followed by GPT acquiring 50% stake in two shopping centres from Perron for $482 million.
Vicinity Centres has also been on the buying side, snapping up a 50% stake in Lakeside Joondalup for $420 million – at a hefty discount to the asset’s peak value – while Hawaiian took full control of Claremont Quarter.
JY Group also paid $195 million for a half-stake in Westfield Whitford City from Singaporean sovereign wealth fund GIC after Scentre Group opted against taking full control of the Perth asset.
Other deals in the final stretch of last year include David Di Pilla’s HMC Capital-managed HomeCo Daily Needs REIT quietly acquiring a western Sydney mall for $180 million and Singapore-listed Paragon REIT and MA Financial offloading dominant Wollongong sub-regional Figtree Grove Shopping Centre to acquisitive Fawkner Property Group for $192 million.
