Scentre sells stake in Westfield Sydney to super fund ART for $864m
Scentre Group has agreed to sell a 19.9 per cent stake in its flagship Westfield Sydney mall to Australian Retirement Trust, lifting the proceeds from selling off chunks of its shopping centre portfolio to $2.2 billion since July.
ASX-listed Scentre, which only two weeks ago sealed a similar transaction to sell a second stake in Westfield Chermside, one of Brisbane’s largest malls, to Dexus, said on Tuesday it sold the Westfield Sydney stake for $864 million, in line with book value and on a value capitalisation rate of 4.69 per cent.
It was the largest confirmed single-asset retail property transaction in Australia.
Lendlease has not confirmed the reported $895 million value of its sale of Erina Fair shopping centre in NSW Central Coast in October to syndicator Fawkner Property.
Under chief executive Elliott Rusanow, Scentre Group – which took over ownership and management of local Westfield-branded shopping centres from the former listed Westfield business in 2014 – is building up a pool of capital to reinvest in the company’s centrally located malls, mainly by developing housing on them.
Tuesday’s Westfield Sydney deal, along with the two 25 per cent stakes it has sold in the Chermside centre to separate Dexus funds earlier this month and in July, bring its total receipts so far this year to $2.2 billion.
There will be more, Rusanow said.
“As of yesterday, we had 11 wholly owned assets,” he told The Australian Financial Review on Tuesday.
“Now it’s 10, but introducing third-party capital in the form of joint venturing our wholly owned assets, is something that we’ll continue to do as the funding needs of the business become opportune to actually extract that capital and redeploy it to further grow shareholder wealth.”
Big plans in residential
Westfield shopping centres were already in great locations that made them major activity hubs for their communities and this suited them well to residential development, Rusanow said.
At its half-year results in August, the company said it had approval for 5600 new homes across three centres – Westfield Warringah and Westfield Hornsby in Sydney and Westfield Belconnen in Canberra. Scentre would give an update at its half-yearly results in February on the pipeline of new housing approvals for its properties, Rusanow said.
“If you look at the map of where our assets are located, throughout Australia and New Zealand and see the potential of that land, we’re talking about multiples of tens of thousands of potential dwellings,” he said.
The landmark shopping centre, at the base of the well-known 309-metre Sydney Tower, drew more than 33 million visits in 2024, or on average 91,780 daily visits. Its premium retail and dining offering spans a gross lettable area of about 97,500 square metres in the heart of the Pitt Street Mall precinct.
QIC will act as investment manager for ART’s stake upon completion of the deal, while Scentre Group will remain the property, leasing and development manager.
ART’s general manager for mid-risk assets and UK Michael Weaver said the shopping centre’s high profile in the middle of Sydney and its prospects for growth made it an attractive investment.
“Westfield Sydney is among Australia’s premier retail destinations that has consistently demonstrated strong performance and resilience through economic cycles,” Weaver said.
“We look forward to developing our partnership with Scentre Group, and leveraging QIC’s investment expertise to manage this premium retail asset for ART.”
