Australian Unity Real Estate Investment (AUREI) has sold a 50 per cent interest in the Waurn Ponds Shopping Centre to ISPT for $63 million. The Geelong based shopping centre is one of five properties owned by the Australian Unity Retail Property Fund (the Fund).
ISPT is one of Australia’s largest unlisted property fund managers, with more than $9.7 billion in funds under management through investments in office, retail, industrial and residential properties. The property is being purchased by the ISPT Core Fund.
The sale follows the completion in May of phase one of a $65 million expansion of the Waurn Ponds Shopping Centre. The expansion will transform the centre into a 47,500 square metre regional shopping hub, ideally positioned seven kilometres from central Geelong at the gateway to Victoria’s famous Bellarine Peninsula and Surf Coast. The expansion has been timed to take advantage of the evolving demographics over the next 20 years, when the population of Greater Geelong is forecast to grow by 35 per cent*. It is being undertaken as part of a joint venture between AUREI and Coles Group Property Developments (Coles) and will be completed before the end of this year.
To coincide with the sale of the Fund’s 50 per cent interest in the Waurn Ponds Shopping Centre to ISPT, Coles has also agreed to sell its share of the expanded component of the centre to ISPT.
The sale will allow the Fund to retain a 50 per cent interest in the completed shopping centre alongside ISPT, while crystallising a capital gain for investors in the Fund and improving its earnings and distribution profile.
Peter Lambden, AUREI’s head of property and asset management, said a 50 per cent sale is in the best interests of investors and will ensure the Fund is best placed to meet its long-term investment outcomes with the appropriate level of risk.
“Retaining 50 per cent of the completed Waurn Ponds Shopping Centre alongside ISPT allows the Fund to maintain a high-quality, income-producing, cornerstone asset while minimising any concentration issues of holding the whole asset,” Mr Lambden said.
“We are pleased to be partnering with ISPT in this transaction, given the strength of their property team and similar investment philosophy to Australian Unity.”
He said selling a 50 per cent interest provides a number of additional benefits for the Fund’s investors.
“The net sale proceeds will be used to reduce borrowings and restructure the Fund’s interest rate hedges. This will be accretive to earnings and lead to a higher, sustainable, distribution return for investors.
“The value of the Waurn Ponds Shopping Centre has increased significantly and investors will receive a special distribution from the capital gain associated with the sale, reflecting AUREI’s active approach to managing assets,” Mr Lambden said.
* City of Greater Geelong population forecasts 2006-11 – www.id.com.au/forecasts/geelong.
Australian Unity is a national healthcare, financial services and retirement living organisation that has been operating for more than 170 years. It is a mutual organisation and provides services to some 600,000 Australians, including 320,000 members.
Over the past decade, the Australian Unity Real Estate Investment team has become one of Australia’s premier unlisted, direct property fund managers. It currently owns and manages more than 50 properties in the healthcare, retail and commercial sectors across Australia and has more than $1.9 billion in funds under management (as at 31 May 2014).
Informed by Australian Unity’s broad and influential community of investment and wellbeing experts, the Real Estate Investment team aims to go further in its insights into Australia’s commercial property markets and deliver deeper perspective to investors.
For more information please contact:
Head of property and asset management, Australian Unity Real Estate Investment
Phone: 03 8682 4546