Erina Fair set to be sold for $900 million

New South Wales’ Erina Fair shopping centre is set to be sold for $900 million after its owner Lendlease secured a buyer for the asset.

Located on the NSW Central Coast, the shopping centre has nearly 113,000sqm of retail space. It is a flagship asset in an unlisted mall fund under Lendlease’s $10 billion Australian Prime Property Fund (APPF) arm.

According to the Australian Financial Review, the deal represents one of the largest standalone asset deals yet in the shopping centre market. It will also be the largest deal for the buyer, Fawkner Property.

A Fawkner Property fund-raising document obtained by the AFR shows the price of $895 million is 22 per cent below Erina Fair’s peak value. It forecasts a 7.25 per cent initial distribution yield to prospective investors.

The deal follows Lendlease’s recent management challenge as its major investors Hostplus and UniSuper sought to replace it with Mirvac as their fund manager.

Lendlease successfully fought off the revolt and retained control of the APPF, but investors are expected to lodge a significant amount of withdrawal requests when a redemption window opens for the APPF Retail fund next month, the AFR reported.

This may ultimately lead to a wind up of the mall fund, which holds interests in Erina Fair and four other shopping centres.

• This story was originally published on Inside Retail Australia.