Vicinity Centres offloads Gold Coast Runaway Bay Centre stake for $132m

Vicinity Centres offloads Gold Coast Runaway Bay Centre stake for $132m

As its $358 million acquisition of 50 per cent ownership in Harbour Town Gold Coast goes unconditional, Vicinity Centres (ASX: VCX) has announced plans to offload its stake in another shopping hub in the beachside city.

The group has exchanged contracts to sell its 50 per cent interest in Runaway Bay Centre for $132 million to Perth-based Greenpool Capital in partnership with Qualitas.

Vicinity reports the transaction price represents an 18 per cent premium to the 30 June 2021 book value, with the sale expected to settle by 30 June next year.

"While Runaway Bay has been a solid asset within our portfolio, this transaction reflects our willingness to recycle our capital into assets with better long-term growth prospects, in this case, in the same attractive catchment," says Vicinity CEO and managing director Grant Kelley.

Meanwhile, the Harbour Town sale has gone unconditional after co-owner Lewis Land Group waived its pre-emptive right to purchase the interest, opening the boom gates for Lendlease-managed wholesale fund Australian Prime Property Fund Retail to buy half the asset with an expected settlement on 30 November 2021.

"Today, we have finalised agreements that strengthen our asset portfolio, having divested an asset at a significant premium to book value and invested in the fast-growing Outlet sector, where Vicinity is competitively advantaged and can extract additional value," says Kelley.

"We are also delighted to enter into a new strategic partnership with Lewis Land Group and confident that our collective expertise in retail property investment and management will drive sustainable, long-term returns for both parties."

Despite challenges to its tourism sector due to international and interstate border restrictions, the influx of new residents has been a boon for the Gold Coast's property sector, buoyed by people moving from other parts of Australia and Queensland who are enticed by the city's lifestyle.

This has emboldened activity in the commercial property space as well, including a recent transaction involving what is arguably the Gold Coast's most iconic destination shopping centre - Pacific Fair - with two AMP Capital entities, Cbus Property and Unisuper taking out an 80 per cent stake in the property.

The deal which also included the sale of a stake in Macquarie Centre, NSW was Australia’s largest retail property transaction at $2.2 billion, although AMP Capital declined to reveal how much of that came from Pacific Fair.

Developer Sunland (ASX: SDG) also recently sold the retail component of its The Lanes project in the Gold Coast suburb of Mermaid Waters for $45.8 million.

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