The deal also paves the way for a long-awaited redevelopment of the centre to begin, however, neither group would put a timetable on the expansion plan.
AMP Capital holds an approval to expand the centre by around 50,000 square metres, with its $750 million scheme approved by planning authorities in 2018.
AMP had been negotiating with Scentre Group’s building arm in regards to a construction contract for the expansion, but placed the redevelopment on hold when joint venture discussions were initiated.
Scentre Group said it would immediately commence pre-development work on a new scheme for the centre, but has placed a planned expansion of Westfield Stirling, formerly Innaloo, on hold to pursue the Booragoon opportunity.
“Opportunities to purchase the best assets like Booragoon are rare,” Scentre Group chief executive Peter Allen said.
“This acquisition follows the transactions we executed earlier in the year, which released $2.1 billion of capital, allowing us to pursue strategic and long-term value creating opportunities such as this one today.”
The half-stake in Garden City was sold by AMP Capital’s Diversified Property Fund.
AMP Capital Diversified Property Fund manager Brett Williams described the deal as an excellent outcome for investors.
“Encouraged by recent investor appetite in high-quality shopping centres, our strategy was to introduce a joint venture partner to reduce asset concentration and provide diversification for our investors,” Mr Williams said.
Management of Garden City will transfer to Scentre Group as part of the transaction.
The deal was brokered jointly by commercial agencies CBRE and Colliers International.
"Garden City Booragoon is one of the most dominant shopping centres in Australia and is ranked in the top five regional centres nationally for specialty MAT per square metre. This is the highest specialty productivity for a regional centre that has transacted in the last ten years,” Colliers International head of retail investment services Lachlan MacGillivray.
“The centre has incredible fundamentals with approximately 9.3 million annual visitors and has an average spend of $68 per person – which places Garden City in the top three centres nationally for average spend per visitor."
The transaction price represents a stabilised economic yield of 5.5 per cent.