Federation sells half stakes in Mandurah shops

Federation Centres, formerly known as Centro Retail, has sold half stakes in its Mandurah and Halls Head shopping centres as part of a $371.4 million deal with property fund manager ISPT.

Federation said it would also sell half stakes in shopping centres at Cranbourne and Karingal in Victoria and Warriewood in New South Wales under the agreement.

Managing director Steven Sewell said the company’s recent name change to Federation Centres reflected the transformation of its business.

The deal follows the sale of half-stakes in the Morley Galleria, Adelaide’s Colonnades and Melbourne’s The Glen shopping centres to the Perron Group midway through last year for $690.4 million

“When combined with the previous Perron Group strategic alliance, on completion of this transaction with ISPT, Federation Centres will have undertaken co-ownership in eight centres with a gross value of $2.1 billion,” Mr Sewell said.

“With more than $1 billion raised from these co-ownership arrangements, we will be well-positioned to grow our business through redevelopment projects across our portfolio of quality Australian shopping centres and further acquisitions of syndicate properties.”

Mr Sewell said the ISPT transaction represented a premium of 2.9 per cent to the book value of the centres on June 30, and an average yield of 7.49 per cent.

At 11:00AM, WST, Federation Centres shares were up 1.91 per cent on the ASX, trading at $2.39.