A significant change in Scentre Group's Perth portfolio means it will defer the expansion of Westfield Stirling.
Garden City Booragoon in Perth will soon be rebranded as a Westfield shopping centre after Scentre Group (ASX: SCG) purchased a 50 per cent interest in the property for $570 million from the AMP Capital Diversified Property Fund (ADPF).
The deal means Scentre and AMP will become joint venture partners in Booragoon Westfield, which will be the brand's fourth centre in Western Australia and the second south of the Swan River.
The transaction sum is just shy of the $575 million Scentre Group received for selling half its ownership in Sydney's Westfield Burwood to Perron Group in May; a deal that also resulted in a joint venture partnership.
Today's deal in Perth is inclusive of long-term property management, brand and development rights.
"Opportunities to purchase the best assets like Booragoon are rare," says Scentre Group CEO Peter Allen.
"We are excited to expand our operating business by adding the rebranded Westfield Booragoon to our leading Living Centre portfolio," says
"This acquisition follows the transactions we executed earlier in the year which released $2.1 billion of capital allowing us to pursue strategic and long-term value creating opportunities such as this one today."
Scentre Group also divested its Sydney CBD office towers in June for a $1.52 billion sale to funds managed by New York-headquartered Blackstone.
Prior to today's announcement, the company had interests in 41 Westfield centres in Australia and New Zealand, including approximately 11,500 outlets and total assets under management of $54.6 billion.
The group highlights Westfield Booragoon's trade area is very strong, with total annual retail expenditure per capita that is 19 per cent above the Perth average, at a level that is comparable to its centres in Bondi (NSW), Miranda (NSW) and Doncaster (VIC).
AMP had previously announced plans to redevelop the centre with a relocated and expanded David Jones store joining the existing Myer and Kmart stores, two full line supermarkets, a new Hoyts Cinema complex and a casual dining precinct.
Artist's impression of AMP's previous plans for the centre's redevelopment.
As it stands the centre includes Myer, David Jones, Kmart, Coles, Woolworths, Hoyts Cinemas and more than 160 specialty stores including Apple, Zara and JB Hi Fi.
Scentre Group says it will immediately commence pre-development work for a new development scheme in order to create long-term value for the co-owners.
"As a result of this significant change to our Perth portfolio, as well as Booragoon's future development opportunities, we have decided to defer the expansion of Westfield Stirling," says Allen.
"The Group intends to retain its ownership of Stirling in order to maximise its performance and preserve the development opportunity in the longer term."
Westfield Stirling is a revamp of the company's centre in Innaloo, and on its webpage the company says it will be reopening in 2020.
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