Stockland has sold two Brisbane malls for a combined total of $143 million to private investors, continuing its push to sell retail assets that do not fit its focus on larger shopping centres.
The country’s largest listed developer said on Thursday it sold Stockland Cleveland shopping centre in Brisbane and the Toowong retail and commercial centre in Brisbane’s southern suburbs at a combined 2.9 per cent premium to combined book value.
“These transactions take our total asset sales for the current financial year to $256.1 million, representing 64 per cent of our target $400 million of divestments already achieved within the first nine months of the stated 24-month timeframe,” chief executive Mark Steinert said.
“The proceeds of the sales will strengthen our balance sheet, and will be reinvested into our workplace and logistics development pipeline and our securities buyback. It also gives us the flexibility to invest in other opportunities with strong risk-adjusted returns above our hurdle rates.”
The sales follow the divestment in November of malls in Bathurst in central west NSW and Caloundra on the Sunshine Coast for a combined $113.1 million at discounts to their book value.
Changing retail patterns, as more people purchase online and look for entertainment and dining options at traditional malls, are weakening the profitability of sub-regional malls – medium-sized centres that typically have one full-line discount department store and a major supermarket.
Stockland is responding by stepping up its program to sell retail centres, and when it reported half-year earnings last month, it said it would sell a further $600 million worth of retail assets – on top of the $400 million already announced – to boost its weighting in logistics and industrial property.
“We continue to strategically reposition our centres, with a focus on customer experience, place-making and retail remixing towards growth categories, to ensure the resilience of our portfolio into the future,” Louise Mason, Stockland’s commercial property head, who is heading the reshaping of the company’s retail portfolio.
Both transactions were expected to settle by 30 June 2019, the company said.