Blackstone decides time is right to exit big Sydney mall
US private equity powerhouse Blackstone has decided the time is right to divest one of Sydney’s best-known malls, Top Ryde City in the city’s north-west, the first retail property it acquired in the Australian market.
With a value estimated around the $600 million mark, the mall at Ryde was once a key component in a $3 billion portfolio of 10 shopping centres that Blackstone had once hoped to sell off through either a float or a mega trade sale, nine years ago.
When that plan came to naught in 2017, the majority of earmarked malls were then sold individually, leaving Top Ryde as one of the last to be offered for sale. JLL’s Sam Hatcher and Nick Willis alongside Colliers’ Lachlan MacGillivray have been appointed. Blackstone declined to comment.
The decision to sell Top Ryde, a near-77,000 square-metre-mall that generates about $488 million in annual sales, comes amid strong investor interest in shopping malls.
Last year, the Queensland Investment Corporation sold Westpoint shopping centre in Sydney’s Blacktown for about $900 million, the biggest standalone retail property transaction yet in Australian history.
Local syndicator Haben and US investment manager Hines each took a half stake in the western suburbs shopping centre. The price represented a capitalisation rate of about 5.75 per cent, in line with recent transactions.
The QIC divestment was the most dramatic example yet of a wave of selling in the mall sector following the pandemic, as smaller fund managers seized their opportunity amid pared-down asset valuations.
Testing the market appetite
As well as Haben, boutique platforms such as Fawkner Property and IP Generation, along with wealthy private firms such as the Andrianakos Property Group – founded by billionaire Nick Andrianakos, who passed away only last month – have been busy acquirers of large malls from their establishment owners over the past three years.
Blackstone bought Top Ryde from receivers in 2012 for $341 million after it had been developed by John Beville only a few years earlier. The US investment house tested the market appetite for it again in 2018, when it was thought to be worth about $700 million.
That offering followed a $90 million overhaul of the mall under Blackstone’s stewardship, which boosted sales significantly after an underperforming Myer store was replaced with a Coles supermarket, and Harris Scarfe and TK Maxx outlets.
It is shaping up as a busy year in the local real estate market already for the US private equity giant, which controls several commercial properties here through many funds.
In a separate move, Blackstone is in the early stages of a potential blockbuster transaction in the office sector through discussions with investment platform Investa over the proposed transfer of its 75 per cent stake in Sydney’s Grosvenor Place.
Blackstone bought 50 per cent of the blue-chip office block 2021 for $925 million, before taking control of 75 per cent through a subsequent deal with China Investment Corporation.
Also on its books in Australia are its two biggest investments. The first is Crown Resorts, which Blackstone took private three years ago and is now busy negotiating a gaming sector under much greater scrutiny and weaker demand.
Even bigger is the AirTrunk data centres platform, which Blackstone bought for $24 billion, the biggest M&A deal of last year.
