Frank Lowy was instrumental in launching the first Westfield shopping centre in Blacktown and spent nearly six decades building that empire, before reaching a $32 billion deal to exit Westfield in 2018.

Now, the Lowy family is backing an investment that will put it back into the league of major shopping centre owners in the country.

The Assembly Funds Management operation, helmed by former Westfield chief operating officer Michael Gutman, is conducting diligence to buy the Woodgrove Shopping Centre in Melbourne for close to $440 million, reported The Australian.

The fund manager is backed by the Lowy Family Group, as well as Alceon Group and Gutman.

 

Assembly’s decision to conduct due diligence on the deal comes only a few months after Dexus also conducted due diligence on the same mall, but was forced to abandon its plans to acquire it after its own fund’s independent board objected to the idea of paying $450 million for the mall.

Assembly reportedly confirmed it was in exclusive negotiations to acquire the “highly attractive” shopping centre. JLL’s Sam Hatcher and Nick Willis, and Colliers’ Lachlan MacGillivray are managing the sale.

Woodgrove is owned by Queensland Investment Corporation. It is a single-level shopping centre occupying 27 hectares of land to the west of Melbourne CBD, an area which has seen a rapid increase in population. The centre draws from a captive trade area population of 172,100, forecast to increase to 290,120 by 2039, representing an average growth rate of 3.5% per annum, according to Colliers.

It comprises more than 60,000sq m of lettable area, generates over $500 million in tenant sales per annum, and is anchored by the likes of Coles, Woolworths, Kmart, and Big W, among others.

 

“AFM’s mandate is to invest through-the-cycle across diversified asset classes to take advantage of changing sectoral fundamentals. We have identified that it is an opportune time in the cycle to acquire a major retail asset such as Woodgrove,” said Gutman.

“A scarcity of new retail space delivered in the last five years, coupled with ongoing population growth, has resulted in an actionable under-supply of retail floorspace,” he said. “It is expected that Woodgrove will deliver an attractive annual distribution to our investors from early ownership, while opportunities to improve the asset will deliver significant total return over the medium term.”

If the deal does proceed according to plan, Assembly could take over ownership and management by the middle of this year.

QIC had a big start to the year with another blockbuster retail property deal in Sydney. In January, in one of Australia’s biggest standalone retail property transactions, global real estate investment manager Hines completed its acquisition of Sydney’s Westpoint shopping centre. The deal was valued at around $900 million for which Hines partnered with Haben Property Fund to acquire the property from QIC.