
Vicinity wins new partners for $500 million malls portfolio
A group of investors, including Future Fund and the Canada Pension Plan Investment Board, have sold their 50 per cent stake in the Grand Plaza shopping centre in Brisbane’s south to US fund manager Invesco for $215 million as part of a broader exit from $500 million of malls managed by Vicinity.
The half stake, sold at about a 6 per cent yield, was held in the Vicinity Retail Partnership, a wholesale fund for a small club of investors that was previously operated by Novion, a forerunner to Vicinity.
Last year the fund sold its half stake in the Rockingham Shopping Centre south of Perth to AMP Capital for about $305 million on a similar yield.
Vicinity has separately retained its own half stakes in both the Browns Plains and Rockingham malls along with management and development rights.
Both the Rockingham and Browns Plains deals were brokered by JLL’s Simon Rooney, who along with Vicinity and Invesco declined to comment.
Invesco typically invests on behalf of funds or separate mandates and is a busy player in the Australian market, recently taking a stake in a $430 million office tower that Lendlease is building in Melbourne’s Docklands for ANZ.
The Vicinity Retail Partnership now holds just one asset, an investment in the Midland Gate mall north-east of Perth, which is undergoing a $100 million redevelopment and is not on the market.
Deals part of broader sell down
The latest two divestments from the partnership have been part of a broader sell down from the fund as it reached the end of its eight-year term.
Last year Charter Hall Retail REIT bought the Salamander Bay Centre, north-east of Newcastle in New South Wales, for $174.5 million from the vehicle.
The previous year investors in the unlisted fund opted to off-load a half stake in the Runaway Bay shopping centre in Queensland.
As Vicinity teams up with its new joint owners at the Rockingham and Browns Plains malls, it is part of a broader trend by dedicated retail landlords to bring in capital partners.
Vicinity is already well down this road. Other major players have struck similar partnership deals recently, such as Mirvac selling a half stake in Kawana Shoppingworld on Queensland’s Sunshine Coast to ISPT for $186 million.
Last last year AMP Capital struck the country’s biggest single-asset retail property deal, with two of its funds taking a combined 50 per cent stake in Brisbane’s Indooroopilly Shopping Centre for $800 million from its owner Commonwealth Superannuation Corporation.
Stockland is also looking for a part sale of its Shellharbour Square regional shopping centre on the NSW South Coast.