Vicinity offloads shopping centres

Mall owner Vicinity Centres has finalised a deal to offload stakes in two shopping centres worth $224.6 million.

Mall owner Vicinity Centres has finalised a deal to offload stakes in two shopping centres worth $224.6 million to industry superannuation property fund-backed ISPT.

The deal was announced last Friday as Vicinity wrapped up its $1.5 billion asset divestment program. Vicinity unveiled the in-principle agreement on the centres in May and has since sold a series of smaller properties.

In the ISPT deal, the listed group will sell a 25 per cent stake in The Myer Centre, Brisbane, and a 50 per cent interest in Mornington Central in Victoria, both to the unlisted manager, for $224.6m.

ISPT, which holds the other 50 per cent stake in the Myer-anchored centre, had sought to ­exercise its pre-emptive rights, arguing they were triggered last year by the merger of Federation Centres and Novion Property Group, which created the $22bn Vicinity.

Vicinity had disagreed about the impact of a pre-emptive rights provision applying to its 50 per cent stake in The Myer Centre but still undertook the deal. Vicinity is now left with a 25 per cent interest in The Myer Centre and a one-off put option in relation to this interest exercisable in the period leading up to the second anniversary of the settlement of the ISPT deal.

Vicinity will continue to manage both the Brisbane centre and Mornington Central, in which the listed group will hold 50 per cent.

Vicinity chief investment officer Michael O’Brien said: “We remain on track to complete our asset divestment program of approximately $1.5bn, having now exchanged contracts on $1.4bn of assets across 12 shopping centres.”

Vicinity’s sales include an $841.4m portfolio of four centres offloaded to a partnership between US private equity giant Blackstone and the listed Mirvac Group, a Queensland asset sold to Asian tycoon Denis Jen for $85m and a half stake in an ACT centre sold to interests associated with the Ell family $120m.

Vicinity has also carved through the sale of a non-core portfolio of about $250m of assets, selling the Tweed Mall to an Elanor Investors Group fund and a buyer is reportedly chasing its Wodonga Plaza complex for about $50m.