STOCKLAND continues to reposition its retail portfolio and grow its logistics and business park focus, selling off the Stockland Wallsend shopping centre in Newcastle for $81 million, as well as its 77 Pacific Highway office building in North Sydney for $112.35 million.
The diversified property group has also just sold its Woolworths-anchored Highlands neighbourhood shopping centre in Melbourne’s northern suburb of Craigieburn for around $43 million, as it looks to divest around its stated figure of $300 million of retail town centres over the next year to 18 months.
It has recently opened the third stage of its redeveloped $414 million Green Hills centre in East Maitland in New South Wales, including a new David Jones store, Neil Perry café, and H&M, and there is more than $500 million in redevelopments across its retail portfolio underway throughout the country.
In it quarterly update last week, it said comparable specialty sales in its retail portfolio had increased to $9,092 sqm, up 3.0% since December 2017, and at Green Hills on-average sales for existing retailers were up “almost 10%” since the launch.
“The divestment of these two assets aligns with our strategy to release capital for reinvestment, and takes the total value of our commercial property asset divestments to $306 million for the FY18 period to date,” Mark Steinert, the group’s managing director and CEO said.
Steinert had told last week’s Macquarie Conference that the group was focused on building its logistics and business parks portfolio, and said in its quarterly update, also last week, it was progressing with its $760 million pipeline.
“We are actively working towards additional asset divestments in the coming months to fund incremental logistics and business parks investment,” he said.
It secured some 56,000 sqm of leasing deals across the industrial portfolio in the quarter.
The second of this week’s divestments, the A-grade, 9,392 sqm 77 Pacific Highway building, has a distinctive glass façade and 15 levels of office space, a ground-floor café and two levels of basement parking. It was refurbished in 2002 and has a 5-star NABERS rating.
Occupants include Saville & Holdsworth Australia, Insurance House, Infosys Technologies Australia, Talent 2 Works and the Health Administration Corporation.
While Stockland kept the buyer’s details undisclosed, it has been reported that an Asian-backed offshore was the frontrunner for the office building after offering more than $110 million.
The tower’s book value in December was $92 million, and Stockland had paid $61.8 million for it in 2000.
Stockland remains on track to achieve funds from operations growth of 5.0% to 6.5% for the full year, and is targeting a distribution 26.5 cents per security, representing 4% growth.
Australian Property Journal