Owners head for the exit at $1.8b Pacific Fair mall
Preparations are under way for a potential full sell-down of one of the Gold Coast’s best-known shopping centres, the $1.8 billion Pacific Fair, in what could become the biggest single deal yet in the retail real estate sector.
While the mooted sale is being pursued through two separate processes, the overall divestment carries significant implications for the broader sector, for shopping mall owners and their investors. It will set the first benchmark price through sale for a major mall following the pandemic disruption of the past 18 months.
A complete change of ownership would have a significant bearing on the fortunes of embattled fund manager AMP Capital, which is progressively losing control of funds and mandates in its real estate business. AMP Capital’s real estate arm, coupled with the larger infrastructure business, have been earmarked for a potential spin-off through a public listing by AMP itself.
After taking control of one of AMP Capital’s flagship funds in April, the $5 billion AMP Capital Diversified Property Fund, Dexus is preparing to divest large assets from it to fund about $2 billion in redemptions.
It is understood the first cab off the rank will be the 20 per cent stake in Pacific Fair, held by ADPF, which AMP Capital valued at $366 million on a 4.75 per cent cap rate. Dexus had recorded a $335.9 million valuation. The JLL and CBRE agencies are understood to be handling that stake.
Already under way is a separate process by the owners of the remaining 80 per cent, the AMP Capital Retail Trust, to divest its units in their entirety. The ownership comprises sovereign wealth fund the Abu Dhabi Investment Authority, the Canada Pension Plan Investment Board and AMP itself.
The ACRT vehicle, which is advised by Colliers International’s Lachlan MacGillivray, also holds a half stake in the $1.6 billion Macquarie Centre at Macquarie Park in Sydney, which is also being divested as part of the process.
A quarter stake in the Macquarie Centre is held by AMP Capital’s $3.6 billion unlisted shopping malls fund, while the final 25 per cent is held by ADPF.
Significantly, at Pacific Fair, the ACRT vehicle is not joining the Dexus divestment, running instead its own separate process to sell its units holding the majority stake.
Typically, that stake would bring with it pre-emptive rights over the smaller holding, which will also soon be offered to the market.
Meanwhile, AMP Capital faces pressure on its real estate business from separate quarters as an independent advisory committee and investment bank Jarden Australia consider proposals for the future management of its $7 billion office fund.
A select group of the country’s top property fund managers – including Lendlease, GPT, Charter Hall, Investa and Mirvac – has lodged submissions for that opportunity.
