Sydney-headquartered GPT Group (ASX: GPT) will spend nearly half a billion dollars on securing a 50 per cent stake in two Perth shopping centres, creating a new partnership with their current owner and local property heavyweight, Perron Group.
The $482 million acquisition to own half of Cockburn Gateway and Belmont Forum will lift the GPT Group retail portfolio's gross lettable area (GLA) by 119,000sqm, adding a combined moving annual turnover of more than $1 billion.
This compares to 1.4 million sqm and an annual turnover of $11.5 billion from its existing 17 retail assets, including just one in Perth - Karrinyup Shopping Centre, which it manages for the property's owner Unisuper.
Valued at $13.7 billion, retail assets represent the second-largest share of GPT's $34.4 billion management platform, with ownership, investments or management deals for the likes of Highpoint Shopping Centre in Maribyrnong (VIC), Macarthur Square in Campbelltown (NSW), Pacific Fair on the Gold Coast, Sunshine Plaza in Maroochydore, and Westfield Penrith.
When it comes to GPT Group's ownership of assets, retail is the largest part of its portfolio with a value of $4.8 billion plus $800 million in co-investments. The group has 100 per cent ownership of Melbourne Central and Rouse Hill Town Centre (NSW), which both have redevelopment plans in the works.
One of the new assets to be acquired also has the potential for expansion, with development approval secured for a 20-year transformation project at Cockburn Gateway. Stage 1 has the potential for around 20,000sqm of incremental retail in the near term.
"This is an exciting partnership which further expands our $14 billion portfolio of retail assets with two centres that are top performing in their respective trade areas and extremely well positioned, in catchments with strong population growth and favourable demographics," says GPT chief executive officer and managing director Russell Proutt.
"Our investment is consistent with GPT’s strategy to build and diversify the Group’s management platform, in alignment with like-minded investment partners," says Proutt, who was appointed to the role in March this year following an almost seven-year stint as chief financial officer (CFO) at another major property player, Charter Hall.
"This acquisition will leverage the Group’s outstanding retail operational capability to drive asset performance and pursue compelling development opportunities.”
Perron Group chief executive officer Adam Irving said the company was delighted to have successfully concluded negotiations over the sale of the half-share stake in both properties.
“We identified GPT as an ideal partner for both Cockburn Gateway and Belmont Forum because of its industry leading experience in both retail and mixed-use developments, as this will be crucial to maximising the value of the assets over time," Irving says.
“This transaction also aligns with the evolution of Perron Group’s broader strategic objectives as a permanent endowment to support the work of the Stan Perron Charitable Foundation.”
Completion of the transaction is expected in February 2025.
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