Vicinity Centres has paid $420 million to buy half of the Lakeside Joondalup shopping centre in the biggest retail sale in Australia this year.
Future Fund sold its half stake to the Australian retail property group, with the other half maintained by Lendlease’s APPF Retail Fund.
The Vicinity Centres’ deal is the latest in a string of shopping centre sales in WA, with a total of $1.4 billion in sales since the start of 2023.
Vicinity’s chief executive Peter Huddle said in a statement to the ASX that he was confident the group could unlock further growth in the centre, which has annual retail sales of almost $800 million.
“Lakeside Joondalup is a fortress-style retail asset located in one of Perth’s principal activity centres and has been on our target list for some time,” he said.
“Geographically, the suburb of Joondalup has been earmarked to become Perth’s second Central Business District and enjoys a captive and growing population, which is expected to drive above average retail sales growth over the next decade.“
![Half of Lakeside Joondalup has sold for $420 million, in the biggest retail sale of the year in Australia.](https://timesofsydney.com/wp-content/uploads/2024/08/1b9f050e2f7d0f5996c4de74d108d625b6c84d26.jpg)
WA has seen a raft of these recent major retail sales over the past 18 months, including the sale of Halls Head Central for $70 million to Centuria Capital, Midland Gate for $465 million to Fawkner Property/PAG and the 50 per cent sale of Rockingham Shopping Centre for $180 million to IP Generation.
It also includes Greenpool Capital $76.25 million purchase of Dianella Plaza, Realside Property’s purchase of Maddington Central for $107 million and HMC Capital’s Daily Needs REIT purchase of Southlands Boulevard for $92.5 million.
CBRE’s head of retail capital markets Simon Rooney the Joondalup sale marks the re-entry of real estate investment trusts back into the Australia’s regional-level shopping centre investment market.
“The Joondalup transaction is the first such acquisition since Scentre Group’s $720 million acquisition of a 50 per cent stake in Westfield Eastgardens in Sydney in mid-2018,” he said.
“It signals renewed interest from both REITs and unlisted wholesale funds in this market sector, which is expected to gather momentum throughout the second half of this year.”
“The value proposition for regional shopping centres has become increasingly compelling for investors, given superior comparative returns on offer, rebased sustainable income profiles and robust performance fundamentals, as compared to most alternative commercial property asset classes,” Mr Rooney said.
CBRE claimed that WA’s strong economic growth, higher levels of disposable income compared to the national average and what it claimed was a “relatively cheap cost of living” in the State had helped drive retail demand, underpinning investor interest.
The Joondalup deal also hands property and retail development management rights at the Joondalup centre to Vicinity has also secured the property and retail development management rights for Joondalup.
Set across nearly 100,000sqm of gross lettable area of 99,832sqm on a 23.8 hectare site, which accounts for a major proportion of Joondalup CBD. The site allows for mixed-use redevelopment.
The shopping centre is anchored by Myer, Kmart, Big W, Target, Coles, Woolworths, Aldi and Hoyts Cinemas. It includes 16 mini-majors and 267 specialties and kiosks.
It is the only regional-level shopping centre in WA to sit on a train line and bus interchange, used by many of the centre’s over 10 million annual customers.
The current trade area has 455,584 residents, which is growing by 1.3 per cent per annum and is anticipated to reach 582,044 people by 2041.