Haben raising $263m to bankroll QIC’s Westpoint shopping centre buy
Haben has hammered down terms to buy 50 per cent of QIC’s Westpoint Shopping Centre in Blacktown at a $900 million valuation – now it just needs to find a way to pay for it.
The property investor, which specialises in retail assets, is seeking $263 million for a seven-year fund, which would house its stake in the shopping centre. It would borrow $244.85 million to come good on its half of the mall, implying a 55 per cent loan to value ratio, according to marketing material seen by Street Talk. The capital raise opened last week, and is expected to be wrapped up around mid-August.
Potential investors have been told to expect 6.6 per cent in average annual distributions which would be paid quarterly, and at least 17 per cent pre-tax internal rate of return after fees. The $900 million gross acquisition price is 40 per cent below the mall’s replacement cost, they were told.
The purchase, negotiated off-market, is the first time in more than two decades that a landlord has sold 100 per cent of a major regional or regional shopping centre in the Sydney metro region in the private market according to the pitch. The mall was built in 1959 and bought by QIC in the early 2000s, which last refurbished it in 2021. Haben’s joint venture partner on the deal is US property investor Hines, which owns and operates $US93.2 billion worth of assets across the world.
The 7.3 hectare main site is anchored by blue-chip tenants including Woolworths, Coles and Aldi, and runs at a 96.4 per cent occupancy rate. However, it does not include a department store. There’s also a 1.7 hectare Kmart site, where Haben wants to push through a new development approval and relocate Kmart to the higher-traffic main centre at the end of its lease.
Other value-add opportunities under consideration include minor cosmetic upgrades in the food court and the Eastern wing, introduction of children-focused areas, and a facelift to the entry points.
Haben has also supplied investors with metrics of a dozen odd comparable deals, including Westfield in Burwood, Parramatta and Doncaster. It reckons it will make 1.6 per cent higher initial yield, while paying a significantly lower acquisition price.
Haben’s portfolio includes the Townsville Shopping Centre, former Blackstone asset Forest Hill Chase in Victoria, Wollongong Central, Croydon Central and Newtown’s Attica. All up, it has managed more than $2 billion in retail property investments across the East Coast.
