Blackstone begins $3bn assets sell-off

Blackstone has begun the carve-up of $3bn worth of retail property holdings more than a year after putting them on sale.

Blackstone has sold the Waverley Gardens shopping centre to Elanor.

Private equity and property giant Blackstone has begun the carve-up of $3 billion worth of retail property holdings more than a year after putting them on the block.

The company’s initial plans to offload the portfolio floundered as worries about e-commerce and the arrival of Amazon hit the confidence of major investors interested in a large-scale transaction.

But a division of the portfolio is on the cards as shopping centre values have been reset as buyers have factored the impact of these forces and are targeting complexes where they can install new tenants if department stores depart.

In the latest play, Elanor Investors Group has swooped on the Waverley Gardens shopping centre in Mulgrave in Melbourne for $178 million.

The elongated deal, which was flagged in The Australian, will see US real estate group Heitman and other local partners back a new fund by Elanor that will own the centre.

Blackstone has had the centre for four year. It picked it up in 2014 as part of a major deal to buy an $826m portfolio from Mirvac that included the then $139.5m Waverley Gardens complex.

The shopping centre is now ripe for repositioning. The 39,554sq m subregional shopping centre in a strong corridor of Melbourne is anchored by Woolworths, Coles and Aldi super­markets, as well as two discount department stores.

The centre is situated on a significant 106,000sq m site near the intersection of two major motorways, which positions it for either expansion or other uses.

Elanor CEO Glenn Willis said the deal “highlights Elanor’s ability to identify high investment-quality assets that rep­resent excellent value for our capital partners and security holders”.

Elanor’s co-head of real estate, Michael Baliva, said the retail investment market was now “presenting opportunities to acquire shopping centres with strong underlying real estate value”.

The deal was brokered by JLL’s Simon Rooney, who said there was “demand for retail ­assets where investors can progressively add value and drive enhanced returns”.

Blackstone is also close to breaking off another piece of its retail property empire by selling Figtree Grove, a major subregional shopping centre in Wollongong, for more than $210m.