Lendlease at pointy end of Westfield Marion sale

In April Lendlease’s investment arm put the half stake in the shopping centre on the market in an effort to raise funds to meet as much as $2 billion in redemption requests from its unlisted retail fund.

If the mooted deal goes through to conclusion, a half stake Westfield mall could change hands for around $700 million. That’s below the $737.5 million book valuation for the remaining stake held by the shopping centre’s co-owner, Scentre Group.

But it’s also a better result than the 10 per cent haircut which was being bandied about as a likely outcome by property pundits over recent weeks.

Singapore Press Holdings is no stranger to the local market, having made forays here before through the Singapore-listed property trust, SPH REIT, which it majority owns.

Last year, SPH REIT joined with Moelis Australia to buy the Figtree Grove shopping centre in Wollongong in a $206 million deal from private equity player Blackstone.

Singapore Press Holdings could make its own headlines here by completing an acquisition of a half stake in the Westfield mall at below book value.

With an estimated $11 billion worth of malls – on Citi numbers – potentially hitting the market, there is already considerable downward pressure on retail property values. That pressure comes in addition to some wariness around the sector due to the potential impact over the long term of e-commerce on shopping habits.

Notwithstanding the fact there are strong arguments that online shopping will not penetrate the Australian market as much as it has in the US and UK, consumer sentiment is sluggish.

An Adelaide deal would send a price signal to other major mooted mall divestments, such as AMP Capital’s move to exit its $1.2 billion Garden City mall in Perth.