Future Fund sells stakes in shopping centers

Australia’s Future Fund has plans to sell its stakes in two shopping centers for A$850 million ($602 million), according to local media outlets.

The two assets are jointly owned with the Lendlease-managed Australian Prime Property Fund Retail.

The deals include a 50 percent stake in Lakeside Joondalup Shopping Center in Perth, for approximately A$650 million ($460 million) and a 25 percent stake in Watertown Brand Outlet on Queensland’s Gold Coast for A$180 million ($127 million).

Lakeside Joondalup in Western Australia is the state’s second-largest shopping center, anchored by Myer, Kmart, Big W, Target, Coles, Woolworths and Aldi. JLL was appointed to sell the 99,000-square-meter (1.1 million-square-foot) Lakeside Joondalup.

Watertown Brand Outlet was sold to Lendlease.

Retail investment activity in 2017 was the second highest on record at $8.8 billion, according to JLL. Over the FY 2018, there was a total of $9.87 billion of sales in the retail market, a 49 percent increase on the prior year, according to Colliers International’s Capital markets investment review 2017/18 ANZ report. Despite mixed sentiment in the Australian retail market, FY 2018 was a record year for investment sales, highlighting the fact that both private and institutional investors see value in the sector.

The major difference between this year and previous
years was the relatively strong trading volumes in the regional center sector. Regional centers represented the largest quantum of transactions, at $3.54 billion.
In total, seven regional centers were transacted, all of which were partial sales. This was the highest number of transactions since FY 2013, when 14 regional centers traded and featured the split of AMP and Westfield co-owned centers.

Consumer sentiment remains positive. Australian retail sales rebounded modestly in August after holding steady in July, led by an increase in spending in discretionary areas, according to the Australian Bureau of Statistics. Sales increased by 0.3 percent to $26.87 billion in seasonally adjusted terms, a result that was in line with market expectations. The modest lift followed an unchanged reading in July.

Cafes, restaurants and takeaway food services (0.7 percent) led the rises. Gains were also seen in clothing, footwear and personal accessory retailing (0.8 percent), other retailing (0.4 percent), department stores (0.9 percent) and household goods retailing (0.2 percent).