Vicinity CEO Grant Kelley joins growing property sector exodus amid rising interest rates

The executive reshuffle at property companies is rolling on as a slowdown looms following rising interest rates.

Shopping centre giant Vicinity Centres has become the latest property company to be hit with a chief executive departure, with Grant Kelley announcing his intention to retire.

The long-serving CEO, who led the company through the coronavirus crisis and then into the recovery phase, will depart next year.

A raft of property companies have changed CEOs with Mirvac unveiling a new CEO, Campbell Hanan, last Friday, after new heads started at Stockland and Lendlease last year.

GPT has also tapped search consultants to find a replacement for CEO Bob Johnston.

Mr Kelly led Vicinity at a time when shopping centres came under severe pressure, even before the pandemic, as consumers switched to online shopping and the values of big malls have fallen.

Vicinity has responded by switching to mixed-use projects, including at Melbourne’s landmark Chadstone Shopping Centre, which it co-owns with billionaire John Gandel, where it has built an entertainment precinct, offices and a hotel.

The executive changes come after the sharemarket rout of property companies, prompting many to look for new strategies and new managers.

Mr Kelley had more than five years in the role and will retire by June 30, 2023, to ensure a smooth handover. Vicinity will kick off a search for Mr Kelley’s replacement, which will comprise both internal and external candidates from Australia and internationally.

But multiple property analysts and investors told The Australian that Vicinity Centres chief operating officer Peter Huddle would likely step up and become chief executive.

Hewas a Westfield stalwart but the top job at local Westfield mall owner the Scentre Group was viewed as likely to go to then CFO, and now chief executive, Elliott Rusanow, who succeeded Peter Allen this year.

Mr Huddle joined Vicinity in March 2019 and has more than 20 years’ experience in real estate development and asset management, with a strong international pedigree.

Prior to joining Vicinity, he had extensive experience in multiple global markets through a number of senior roles across Westfield when the Lowy family was at the helm.

Mr Huddle was most recently chief operating officer of Unibail-Rodamco-Westfield, USA after the French company’s acquisition of Westfield. Before the deal, he was Westfield’s senior executive vice president and co-country head of the USA, where he led the US development teams through a prolific period of mall expansion.

As Vicinity‘s chief operating officer, he is responsible for leading the teams on all aspects of its shopping centres including management, operations, leasing, development and marketing.

Any successor will face challenges as large malls have fallen dramatically from favour with few recent transactions in Australia and the values in steep decline offshore.

Vicinity’s chairman, Trevor Gerber, said that the CEO had led Vicinity through the significant and unprecedented challenges of the pandemic while, at the same time, ensuring the company was well positioned to deliver on its long-term growth objectives.

Although its shares are down almost 27 per cent over the last five years, it had been the best performing stock in the A-REIT index over the past 12 months, the company said.

The company raised about $1.2bn of equity in mid-2020 during the pandemic, leaving it with a strong balance sheet to deal with that crisis.