Lowy family goes shopping for Melbourne mall in $440m deal
A private investment house which is backed by the Rich Lister Lowy family has partnered with one of the world’s biggest property fund managers to buy a $440 million shopping centre in suburban Melbourne.
The purchase of Woodgrove shopping centre on the western outskirts of Melbourne represents a return by the Lowy family as a private investor to major shopping malls. Sir Frank Lowy co-founded the Westfield empire before selling its global arm in a $32 billion deal eight years ago.
The deal has been put together by Assembly Funds Management, which runs real estate private equity funds. Assembly itself was set up in 2019, only two years after the Lowys’ big exit from the malls sector and was formed by Michael Gutman, who was previously a senior Westfield executive, the Lowy Family Group – the private company of Sir Frank and his sons David, Peter and Steven – and investment firm Alceon.
To complete the transaction Assembly has teamed up with PGIM Real Estate, which already has a big presence in Australia and is the world’s third-largest real estate investment manager, with $210 billion in assets under management.
On the sell side another big name is involved: QIC, which over the past three decades has managed and developed a mall that generates $520 million for its tenants annually.
The transaction is also the latest example of a broad sell-off of some of the country’s larger malls over the last three years by their institutional owners to smaller private fund managers and syndicators as part of the shake-out across the shopping centre sector following the disruption of the pandemic.
While it’s the first big mall to absorbed into Assembly’s series of small funds, it’s not the first retail asset for the platform, which already holds Sunshine Square, a homemaker hub in Melbourne’s west as well as part of a diverse property portfolio.
Assembly’s chief investment officer Tim Meurer said there were limited opportunities to acquire large malls at a time when the cost of replicating them was unviable. On 27-hectare land parcel, Woodgrove comes with plenty of development potential.
“AFM is acquiring its share of the asset on behalf of investors in its diversified fund series, which will shortly open for a new equity raise, and a new syndicate of high-net worth investors,” he said.
Steve Bulloch, who leads PGIM Real Estate in Australia, said the retail sector had had its challenges in recent years but said the US investment platform remained “very selective in the retail space”.
“This opportunity ticks a number of boxes for us, offering a solid existing cashflow, trading performance, as well as several opportunities for asset enhancement,” he said.
The Woodgrove transaction was brokered through JLL’s Nick Willis and Sam Hatcher and Colliers’ Lachlan MacGillivray,
