In one of Australia’s biggest standalone retail property transactions, global real estate investment manager Hines has completed its acquisition of Sydney’s Westpoint shopping centre.
In a deal valued at around $900 million for which Hines partnered with Haben Property Fund, it acquired the property from the Queensland Investment Corporation.
Westpoint’s blue-chip tenants including JB Hi-Fi, Woolworths, Coles, Kmart and Aldi are spread across the mall’s approximately 104,000 square meters of core retail space.
QIC owned the shopping centre for over three decades. “Westpoint is an exemplary asset that QIC has been proud to steward over 34 years, driving value creation into what has become the retail and lifestyle heart of Blacktown,” said Michael Fattouh, fund manager for QIC’s Town Centre Fund.
Haben outlined its reasons for supporting the deal and pointed to its prime 9-hectare location within Sydney Metro. “We
observed a void of buyers at the large end of the market. Global capital investment in real estate is resurging due to positive rent spreads. Westpoint, the fastest-growing LGA [local government area] in NSW, offers significant growth potential with its large trade area and extensive infrastructure projects,” said Ben Finger, managing director at Haben.
Hines’ own research has indicated that recent supply constraints in the retail sector have effectively ‘right sized’ the market to align it with new demand realities.
“Not all retail is created equal. There are opportunities to invest in places that truly stand out, especially for those who know where to look,” said David Warneford, country head of Australia and New Zealand at Hines. “The retail sector is showing promise, but it’s important to focus on the right opportunities.”
Recent data from other mall operators are showing that some of Australia’s biggest malls are beginning to perform better than expected. Westfield operator Scentre Group, for example, said in November that it welcomed 429 million customer visits until that point since the start of the year, 8.7 million more than the same period in 2023. A record $28.8 billion of annual sales was achieved by its business partners to 30 September 2024. Last year, Scentre Group and investment bank Barrenjoey finalised the acquisition of a half stake in Adelaide’s Westfield West Lakes for $174.8m.
Similarly, mall landlord Vicinity Centres beat its earnings guidance over FY24 and lifted occupancy to its highest level since before the pandemic. Vicinity, which co-owns Chadstone Shopping Centre, reported operating earnings of 14.6¢ per security. Net profit came in at $547.1 million, double the $271.5 million in FY23. In 2023, Vicinity bought back half of Sydney’s Chatswood Chase for 45 per cent of the price paid last decade.
In the September quarter, GPT group struck new leases at rents on average 3.5 per cent above the outgoing figure and usually with annual average fixed rent increases of 4.9 per cent. GPT Group acquired a 50 per cent stake in Northland Shopping Centre for $496 million.