Lendlease beats slowdown with run of mall deals
Lendlease is in the final stages of a $630 million sell-down of four malls across two funds it manages through its investment platform, striking strong deals despite a relatively subdued retail property market.
The biggest of the deals was finalised this week, as Warren Ebert’s busy syndication platform, Sentinel, settled its $280 million acquisition of Caneland Central Shopping Centre at Mackay in Queensland.
The sale of Caneland – with 66,000 sq m of retail space, it is the largest shopping centre north of the Sunshine Coast – is the only time this year a 100 per cent stake in a regional mall has changed hands.
The Caneland deal comes after Sentinel finalised its $418 million acquisition of Darwin’s Casuarina Square in February. Both sales were brokered by JLL’s Nick Willis and Sam Hatcher.
“Like Casuarina Square, Caneland Central completely dominates its market,” Sentinel’s Mr Ebert said.
“Every man, woman and child in Mackay comes to Caneland four times a month. You could never duplicate this centre and you also cannot find another 14ha site like this in the city, let alone even close to the city.”
The Mackay mall was held in the Lendlease-managed APPF Retail fund. Its divestment will help meet redemptions.
“APPF Retail is continuing to evolve in line with changing consumer demands and is positioning its assets to offer more mixed-use opportunities to cater to future lifestyle, technology and shopping needs,” fund manager Anne MacSporran said.
JLL’s Mr Willis said this year’s tally of mall deals was around half that of last year’s record above $13 billion.
“This transaction is a positive endorsement for Australia’s retail investment market,” he said. “It represents the second shopping centre trade above $250 million in 2022, (excluding large format retail) and the largest shopping centre to have been formally marketed and sold this year.”
A second suite of sales has also been under way through the progressive wind-up of the Lendlease Sub-Regional Retail Fund which, when completed, will realise around $350 million in divestments.
This week Lendlease exchanged contracts for the sale of Menai Marketplace in Sydney and Southlands Boulevarde in Western Australia to funds managed by ASX-listed HMC Capital for $242.5 million in total.
A third asset held in the Lendlease’s SRRF, the Settlement City mall in NSW is being circled by super fund investment manager ISPT.
The $150 million Menai mall becomes the seed asset for HMC’s unlisted Last Mile Logistics fund, which is on track to be established in the 2023 first half with a target first close equity raising of $500 million, giving it $1 billion in acquisition firepower. The $92.5 million WA mall is to be held in the listed HomeCo Daily Needs REIT.
CBRE’s Simon Rooney and James Douglas and JLL’s Nick Willis and Sam Hatcher handled Lendlease’s sub-regional portfolio.
“A combination of investor focus shifting to convenience retail and the high-profile nature of the portfolio, generated significant enquiry, genuine buyer interest and competitive bidding,” CBRE’s Mr Rooney said.
