Australian Retirement Trust (ART) has agreed to purchase a 50 per cent interest in Brisbane’s Westfield Mt Gravatt for $882.5 million.
Scentre Group will continue to own 50 per cent of the shopping centre and will remain the property, leasing and development manager.
Located 12 kilometres south of the Brisbane CBD, Westfield Mt Gravatt has a gross lettable area of over 141,000sqm and houses more than 370 retailers, including Myer, Big W, Kmart, Target, Coles, Woolworths and Aldi. The centre boasts annual retail sales of $1 billion and 17.4 million customer visits.
The transaction includes property interest in Westfield Mt Gravatt for $870 million, as well as an adjacent parcel of sundry land for $12.5 million. The aggregate $882.5 million of gross proceeds represents a 3.5 per cent premium to the book values as at last December.
“Introducing new capital, through joint venturing our assets, forms a key part of our long-term strategic plan,” said Scentre Group CEO Elliott Rusanow. “In the last 13 months, we have announced approximately $3.1 billion of new third-party capital coming into the group through the joint venturing of our assets.”
The deal is subject to ART obtaining clearance from the Australian Competition and Consumer Commission.
In a separate announcement, Scentre Group reported a 4.4 per cent increase in funds from operations (FFO) to $612 million for the six months ended June 30, with distribution up 4.9 per cent to $481 million.
Westfield locations welcomed 347 million customer visits during the period, an increase of 3.5 per cent.
Occupancy remained at its highest level in more than a decade of 99.8 per cent, up 10bps year-on-year. Business partners achieved sales growth of 3.7 per cent, and specialty sales rose 5.1 per cent.
Statutory profit for the period was $975 million and includes an unrealised property valuation increase of $478 million. As at June 30, the group’s portfolio was valued at $33.7 billion.
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