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SPH REIT to acquire 50% stake in South Australia's largest shopping centre for $636.5 mil

Uma Devi
Updated

SINGAPORE (Nov 7): SPH REIT is acquiring a 50.0% stake in Westfield Marion Shopping Centre in Adelaide, Australia, for a consideration of A$670.0 million ($636.5 million).

Marion Sub Trust, which is wholly-owned by SPH REIT, on Thursday entered into a sale of land contract with investment management platform Lendlease Real Estate Investments.

The acquisition is expected to be completed by end-2019. Post-completion, Scentre Group, the current co-owner of the shopping centre, will be SPH REIT’s partner in the joint venture.

The manager of SPH REIT says that the consideration was arrived on a willing-buyer and willing-seller basis, taking into account the independent valuation of Westfield Marion of A$679.5 million on Aug 6.

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Westfield Marion is South Australia’s largest shopping centre, with a gross lettable area (GLA) of approximately 1.5 million sqft across a three-storey retail mall, with five storeys of office space.

The shopping centre is also well-represented by Australian National retailers such as David Jones, Coles and Target.

The freehold property sits on a land parcel of around 2.5 million sqft, located approximately 10 kilometres from Adelaide’s Central Business District.

SPH REIT says that the acquisition provides entry into the stable Adelaide market and further expands the group’s strategic presence in Australia, following the Figtree Grove Shopping Centre acquisition last year.

See: SPH REIT acquires 85% stake in Australian shopping centre for $175.1 mil

SPH REIT also adds that the acquisition will strengthen the quality of its portfolio, by adding further asset and geographical diversification, as well as lengthening the portfolio weighted average lease expiry (WALE).

Westfield Marion boasts a healthy occupancy of 99.3% by GLA, as well as a well-distributed Weighted Average Lease Expiry (WALE) of 6.7 years by GLA and 4.2 years by income.

Following the acquisition, some 19.7% of SPH REIT’s portfolio by valuation will be derived from Australia, a significant spike from the 5.3% prior to the acquisition.

Units in SPH REIT closed 1 cent lower, or down 0.9%, at $1.14 on Thursday before the announcement.