10/09/2013 - 18:49

Westfield adds Innaloo to Perth sell-off

10/09/2013 - 18:49

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Westfield Group looks set to offload its stake in two major shopping centres in suburban Perth just days after it was given the green light to increase ownership of the Karrinyup centre.

The group announced late yesterday it has sold its one-third stake in Karrinyup shopping centre to co-owner UniSuper for $246.7 million, giving the superannuation fund full ownership of the centre.

In another surprise move, it was revealed today that it has a conditional agreement to sell its Innaloo Shopping Centre to property group Charter Hall for $255 million.

Charter Hall said in April that it was in negotiations to buy Innaloo and this morning announced the transaction was dependant on Westfield selling its stake in Karrinyup.

It has entered into a put option with Westfield, giving Westfield the right to sell the shopping centre as well as the adjoining Innaloo Mega Centre.

The put option can be exercised by Westfield at any time up to 25 December 2013.

Charter Hall said that if the transaction proceeds, it would retain a 15 per cent stake in the Innaloo property, with the balance held by a global institutional partner.

If the sale to Charter Hall goes ahead it will be the third Perth shopping centre that Westfield has sold out of in the past year - it also sold its 25 per cent stake in Garden City shopping centre in Booragoon in October last year for $227 million.

The latest move goes against expectations Westfield would focus on either Karrinyup or Innaloo after the Australian Competition and Consumer Commission last week announced it would not oppose Westfield increasing its ownership of Karrinyup if it sold Westfield Innaloo.

The ACCC had investigated Westfield's intentions to increase ownership of Karrinyup because it's only three kilometres away from Innaloo and there was a likelihood a single owner of both could have extracted higher rents from retailers.

Westfield Group said the sale of Karrinyup, which valued the Karrinyup centre at $740 million, represented a 5 per cent capitalisation rate on passing income and a premium of approximately 19 per cent to its book value for its non-managed interest in the centre.

The group still holds ownership of Carousel Shopping Centre and Westfield Whitford City.

 

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