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Scentre Group (ASX: SCG) has today announced it will be selling off half its stake in Sydney's Westfield Burwood shopping centre in order to pay down debt and pursue strategic goals.
The deal means Perth-based Perron Group will become a 50 per cent joint venture partner after paying $575 million for its stake, representing a 4.1 per cent premium to the asset's book value as at 31 December 2018.
Scentre Group CEO Peter Allen says the company is pleased to extend its longstanding relationship with the Perron Group into Westfield Burwood.
"This transaction highlights the value of Scentre Group's extraordinary platform of 41 Westfield living centres. The proceeds will provide the Group with further capital to pursue our strategic objectives of creating long-term value for securityholders," says Allen.
Perron Group CEO Ross Robertson noted his team's excitement around a "unique opportunity" to invest in one of the highest quality shopping centres in Australia.
"Westfield Burwood is one of the top 50 shopping centres in Australia with customer visitation of more than 14 million per annum and total retail sales of close to $500 million," says Robertson.
In a quarterly operating update released earlier this month, Scentre Group noted a 1.7 per cent year-on-year increase for in-store sales across its portfolio, which includes seven of Australia's top 10 centres and four of New Zealand's top five. Discount department stores, footwear stores and supermarkets were the best performers in terms of growth.
At the time, the company had current and future development activity of more than $3.7 billion, including the NZD790 milion (AUD747 million) Westfield Newmarket redevelopment in Auckland which is on track to opening during the second half of this year.
At the time of writing SCG shares were down slightly by 0.13 per cent at $3.835 per share.
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