Vicinity Centres (ASX:VCX) is set to take on a 50% interest in Perth’s Lakeside Joondalup Shopping Centre, stressing the value of the asset both in terms of strong retail sales figures and future plans for the surrounding district.
Through a settlement on August 19, Vicinity paid $420 million to acquire a half interest in the property, which is also owned by the Australian Prime Property Fund – Retail, whose investment is managed by Lendlease.
CEO and Managing Director Peter Huddle stressed that Vicinity had been long interested in buying up an interest in the site.
“Lakeside Joondalup is a fortress-style retail asset located in one of Perth’s principal activity centres and has been on our target list for some time,” he said.
“Geographically, the suburb of Joondalup has been earmarked to become Perth’s second Central Business District and enjoys a captive and growing population, which is expected to drive above average retail sales growth over the next decade.
“The acquisition of Joondalup, together with the forthcoming redevelopment of Galleria and sale of four non-strategic assets in Western Australia, reflects our deliberate strategy to recycle and redeploy capital in order to right-size our investment and strengthen our asset portfolio in Western Australia.”
Mr Huddle also said Lakeside was an important investment in terms of its retail sales volumes.
“Importantly, Vicinity has also secured the property and retail development management rights for Joondalup, which provides the opportunity to utilise our retail management platform to drive asset performance, whilst earning additional fee income,” he said.
“With Lakeside Joondalup already achieving annual retail sales of almost $800 million, and with Vicinity’s scalable retailer partnerships, we are confident there is growth and value to be unlocked.”
Vicinity shares have lifted slightly on the news. At 12:38 AEST, they were trading at $2.19, a rise of 0.23% since the market opened.