Westfield owner teams with investment bank to lock in funds deal at Adelaide mall

The purchase shows that big players are again buying top centres and more sales are underway.

Scentre Group and Barrenjoey Private Capital are buying a half stake in Westfield West Lakes.

Westfield owner the Scentre Group and investment bank Barrenjoey have stepped up their shopping centre funds management ambitions by finalising their acquisition of a half stake in Adelaide’s Westfield West Lakes for $174.8m.

The deal is another marker in a busy period for shopping centres trades, which has been marked out of institutions chasing big ticket assets.

Scentre and Barrenjoey have been active since bursting onto the scene with the purchase of a half stake in Westfield Tea Tree Plaza, which is also in Adelaide.

CBRE head of retail capital markets, Pacific, Simon Rooney negotiated the deal, on behalf of the Dexus Wholesale Property Fund, which has been selling down assets. It also offloaded a centre in Townsville to Fawkner Group for $212m, as it deals with ongoing redemptions.

Scentre Group remains as co-owner and property manager of the other 50 per cent of the Adelaide asset and will continue to drive its strong performance.

Scentre Group effectively stepped into the transaction under a pre-emptive agreement, marking its second foray into funds management following the group’s June acquisition of a 50 per cent interest in Westfield Tea Tree for $308m.

“The West Lakes transaction demonstrates the resurging investor interest in larger regional shopping centres, given that these centres have already rebased their income back to sustainable levels and are now positioned for growth,” Mr Rooney said.

“We’ve seen $1.1 billion in high-quality regional retail assets recently change hands, including 50 per cent stakes in Westfield Tea Tree, Lakeside Joondalup and Claremont Quarter, with a further $1.3 billion in deals currently in play,” he said.

Private investment house Hawaiian last month took full control of Perth’s Claremont Quarter by buying out its investment partner, funds manager QIC, in a deal valuing the stake at about $207m.

Notably, GPT’s flagship retail property fund is offering up a half-stake in the $850m Northland Shopping Center in Melbourne in one of the biggest retail plays of the year.

And the listed Abacus Property Group quietly snapped up another slice of the iconic Myer Melbourne building from its co-owner, a listed Charter Hall real estate investment trust, taking its stake in the property to 50 per cent from 33 per cent.

“Ahead of Scentre Group exercising its pre-emptive right, the Westfield West Lakes opportunity garnered strong domestic and offshore investor interest. This was underpinned by the opportunity to acquire a stake in a dominant, strong performing regional shopping centre in Adelaide’s affluent northern suburbs,” he said.

“The centre offers genuine value-add potential and robust investment fundamentals, with potential buyers attracted by the quality of the asset and the long-term growth potential,” Mr Rooney added.

Westfield West Lakes is the dominant food, service, and convenience-based centre in Adelaide’s northern suburbs. It has a gross lettable area of 71,051sq m and is securely anchored by a strong performing and recently refurbished David Jones, Woolworths and Coles supermarkets, Kmart, Target and Harris Scarfe discount department stores and Reading Cinemas.

The future mixed-use development potential for the property is supported by an under-utilised 20.4ha landmark site, strategically positioned to benefit from the adjoining WEST Development, a 36.4ha masterplan development set to deliver 1,300 dwellings and wider community facilities.

Major tenants report a combined $216m in sales per annum and, alongside the major tenants, the centre is securely leased, with major and national chain retailers representing 95 per cent of total space.

Originally published as Westfield owner teams with investment bank to lock in funds deal at Adelaide mall