A decade ago, the GPT Group acquired a 50 per cent stake in Northland Shopping Centre for $496 million. The GPT Wholesale Shopping Centre Fund (GWSCF) bought the stake from the Canada Pension Plan Investment Board.
Now, GPT’s flagship retail property fund is offering up a half-stake in the $850m Northland Shopping Center in Melbourne.
The two-level 98,000sq m centre has retailers including Myer, Kmart, Target, Aldi, Coles, Woolworths and Hoyts Cinemas and more than 200 speciality stores.
It has the best-performing Myer store in Victoria and boasts a major tenant weighted average lease expiry of nearly 7.5 years by income, according to The Australian, making this centre an even more attractive proposition for investors.
The exit by the GWSCF comes as it reportedly looks to remix and diversify its portfolio and focus on centres where it holds the management.
In partnership with manager Vicinity Centres, five international mini majors – H&M, Uniqlo, JD Sport, Sephora and TK Maxx – were opened.
The centre’s fashion malls and the outdoor entertainment and dining precinct were upgraded, boosting annual sales to over $660m.
Northland is in Melbourne’s gentrifying inner north market, making it an attractive site for mixed-use projects. Big malls are being pursued by property investors as they could have the potential to build apartments around them to address the housing crisis. The property has significant development potential, with a masterplan for a 30-year staged development. It could hold 2,300 apartments and office towers in the future.
Northland is one the first super regional malls to be offered in Melbourne in years, and could result in a contest between a mix of local institutions, offshore investors and wealthy developers to acquire the stake.
Potential buyers in Northland will also be able to team up with co-owner and manager Vicinity Centres.
Colliers and CBRE are managing the sale of the interest in the centre. “Recent market conditions have seen a resurgence of liquidity, driven by $3.1 billion in key scalable transactions over the past year. This favourable environment makes the introduction of Northland Shopping Centre particularly timely, presenting a unique opportunity for investors,” said Colliers agent Lachlan MacGillivray.
Mall landlord Vicinity Centres recently beat its earnings guidance over FY24 and lifted occupancy to its highest level since before the pandemic. Vicinity reported operating earnings of 14.6¢ per security. Net profit came in at $547.1 million, double the $271.5 million in FY23.
It also settled the $420 million purchase of a half-stake in Perth’s Lakeside Joondalup Shopping Centre, acquiring it from the Future Fund.
Scentre meanwhile which has 42 Westfield locations in Australia and New Zealand, recently teamed up with investment bank Barrenjoey to buy half stakes in its own malls, which some investors are selling as they come under increasing pressure.
In April, Scentre established the $310 million Tea Tree Opportunity Trust which purchased a 50 per cent share in Adelaide’s Westfield Tea Tree Plaza. The group continues to own the other 50 per cent of the centre. Additionally, last month, reports surfaced that Scentre will also pay $167.3 million for 50 per cent of Westfield West Lakes in Adelaide, South Australia’s third-largest shopping centre.
