Queensland’s QIC sells out of Westpoint to fund manager and US group
Queensland government fund manager QIC has sold off Sydney’s Westpoint Shopping Centre to Haben and a US group.
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Queensland government fund manager QIC has sold off Sydney’s sprawling Westpoint Shopping Centre for a record-breaking $900m.
The deal shows that large retail property assets are again appealing for top investors.
The centre, in the western suburb of Blacktown, is benefiting from the area’s surging population and is expected to be repositioned by its buyers – fund manager Haben and US group Hines.
Positioned on a 9ha site, the centre is among the properties benefiting from planning focused on mixed-use development in rapidly growing urban areas, although the focus of the buyers is to realise its retail potential.
The pair have been helped by the prospect of interest rates coming down, which is more broadly helping funds managers make deals worthwhile and will also aid consumers struggling with the cost of living.
The Australian in June revealed the move by the two funds managers and they have raised about $520m of equity in total to back the purchase, under which they will jointly own Wespoint.
The 110,000sq m complex is anchored by tenants such as Woolworths, Coles, Aldi, Kmart, Target, Big W, Hoyts, JB Hi-Fi, TK Maxx, Harris Scarfe, Priceline, Rebel, Tong Li Supermarket and Uniqlo.
The centre traded on a yield of about 5.75 per cent, which is understood to be in line with its book value and Haben hopes to bolster returns. Large shopping centres are back on an even footing after tough times during the coronavirus crisis – and deep writedowns on values even ahead of that period as the tide of e-commerce swept across Australia.
Landlords have responded by remixing centres, as anchor tenants like David Jones and Myer have reduced their floor space and more productive tenants have taken up residency. This has resulted in centres being almost full despite the economic squeeze on household spending slowing clothing and fashion sales.
The centre is the largest single property asset to be traded in Australia. Haben is one of a series of syndicates which have bought into retail centres ahead of large institutions fully returning to the market.
“Westpoint Shopping Centre is a significant asset offering core retail and mixed-use zoning in one of Sydney’s fastest-growing metro areas,” Haben managing director and co-founder Ben Finger said.
“This acquisition presents a strategic opportunity to partner with Hines on their first Australian retail acquisition, establishing one of the largest retail partnerships in Australia.”
He said Haben would take on the centre’s management and has “a strong belief in the resilience and potential of the Australian retail market”, and her highlighted Westpoint’s “expanding demographic”.
QIC Town Centre fund manager Michael Fattouh said the deal reflected a performance driven by 34 years of active management. The property was jointly owned by the QIC Property Fund and QIC Town Centre Fund.
The deal was brokered by Colliers agent Lachlan MacGillivray, who said it was the most significant single transaction of an entire established retail asset in Australia, eclipsing the sale of Indooroopilly Shopping Centre in Queensland in 2017.
“The asset possesses all the key attributes investors are seeking: a large Sydney metro landholding, proximity to major roads, and co-location with a train station and bus interchange,” Mr MacGillivray said.
It was also the first regional shopping centre in Sydney’s metro area to change hands since US private equity group Blackstone bought Top Ryde in 2012.
The trust that Haben set up to hold its stake was billed as a chance to buy a major regional shopping centre at a 40 per cent discount to its replacement value. The surge in building and land cost make building regional centres prohibitive at a time when there is a surge in population growth.
Originally published as Queensland’s QIC sells out of Westpoint to fund manager and US group
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