Stockland gets 120% return on Karrinyup sale

Property group Stockland has sold its 25 per cent stake in the Karrinyup shopping centre for $152.5 million, more than doubling the value of its original investment.

Stockland paid $69 million for its stake in Karrinyup, which was acquired as part of its acquisition of the AMP Diversified Property Trust in 2003.

The sale represents a return of 121 per cent on its four-year investment, and values the entire shopping centre at $610 million.

The sale comes at a time when the financially embattled Centro group is considering the sale of its assets, which include the Galleria shopping centre in Morley and several smaller centres in WA.

Centro said in July last year that its 50 per cent stake in Galleria was worth $292.5 million, valuing the centre at $585 million

Westfield and UniSuper have agreed to purchase Stockland's stake in the Karrinyup shopping centre, located 12 kilometres north west of the Perth CBD.

Westfield will lift its stake to 31.25 per cent while UniSuper will have a 68.75 per cent stake.

Stockland Retail CEO John Schroder said the decision was in line with the group's approach to active asset management.

"The sale of our stake in Karrinyup is aligned with our stated strategy of adding value to our retail portfolio by actively managing, leasing and developing our own retail centres."

"Our development pipeline continues to gather momentum, and we will be focusing on the delivery of a number of key projects and other strategic opportunities in Australia and the UK in the months ahead," said Mr Schroder.

Mr Schroder said the sale price was above book value and represented an initial yield of 5.15 per cent. .

The sale follows Stockland's announcement last month that it had sold its 50 per cent interests in three New Zealand shopping centres (Botany Town Centre, Lynnmall Shopping Centre and Manukau Supa Centre) to joint owners AMP New Zealand Property Retail Limited for $322 million at a total blended yield of 5.9 per cent.

Stockland retains significant investments in Western Australia, with over $460 million of office properties (including 50 per cent stakes in premium CBD buildings BankWest Tower and Exchange Plaza), over $170 million of retail properties (Stockland Bull Creek, Stockland Baldivis and Stockland Riverton) and ten residential communities located across the state.