The shopping centre giant has acquired a 50 per cent stake in Lakeside Joondalup for $420 million.
Vicinity Centres has purchased a 50 per cent stake in Lakeside Joondalup from Future Fund for $420 million; the largest retail deal of the year.
The shopping centre giant announced the move today, as it released it FY24 results, showing a net profit after tax of $547.1 million, a 101 per cent increase on the previous financial year.
The deal marks the first regional shopping centre transaction of 2024 in Western Australia, with the last major shopping centre to change hands being Midland Gate in late 2023.
It also marks Vicinity’s first acquisition in WA this year, with the company divesting multiple WA assets in the past 12 months, including Midland Gate, Dianella Plaza, Karratha Shopping Centre and Maddington Central.
Speaking about the Joondalup acquisition at the company’s results presentation, Vicinity Centres chief executive Peter Huddle said the business was drawn to the location and fundamentals of the centre.
“It is on a significant landholding connected by rail in a principal activity centre in Perth and we see opportunities from a retail point of view and longer term potentially some opportunities outside of retail,” he said.
Vicinity Centres also owns the Galleria Shopping Centre in partnership with Perron Group and has been planning to redevelop the asset for several years.
Mr Huddle told investors Vicinity would likely start the Galleria redevelopment in late 2025, with its current focus on its Chatswood (NSW) and Chadstone (Victoria) shopping centre redevelopments.
In an ASX statement, Mr Huddle said the acquisition of Joondalup, the forthcoming redevelopment of Galleria and strategic sale of four non-strategic assets in WA reflected Vicinity’s strategy to recycle and redeploy capital in order to right-size its investment and strengthen its asset portfolio in WA.
“Importantly, Vicinity has also secured the property and retail development management rights for Joondalup, which provides the opportunity to utilise our retail management platform to drive asset performance, whilst earning additional fee income,” he said.
“With Lakeside Joondalup already achieving annual retail sales of almost $800 million, and with Vicinity’s scalable retailer partnerships, we are confident there is growth and value to be unlocked.
“In this context, we look forward to curating an even stronger, flagship asset for Vicinity’s securityholders and on behalf of the asset’s co-owner, the Australian Prime Property Fund – Retail, managed by Lendlease.”
Lendlease will retain its half stake in the asset, which was sold on a 6.5 per cent yield.
CBRE brokered the deal.
