Vicinity Centres buys 50% stake in WA shopping centre for $420 million

Vicinity Centres has acquired a 50% stake in Western Australia’s Lakeside Joondalup shopping centre for $420 million, marking Australia’s largest retail property transaction of 2024.

The deal, brokered by CBRE, sees Vicinity purchase the stake from the Future Fund, with Lendlease’s APPF Retail Fund retaining the remaining 50% interest.

CBRE’s Head of Retail Capital Markets Simon Rooney said the sale attracted strong interest from domestic investors.

“The acquisition marks the re-entry of REITs into Australia’s regional shopping centre investment market,” Rooney said.

“It signals renewed interest from both REITs and unlisted wholesale funds in this market sector, which is expected to gather momentum throughout the second half of this year.”

The transaction is the first major regional shopping centre acquisition by a REIT since 2018, when Scentre Group bought a 50% stake in Westfield Eastgardens in Sydney for $720 million.

Lakeside Joondalup comprises nearly 100,000 square metres of gross lettable area, anchored by major retailers including Myer, Kmart, Big W, Target, Coles, Woolworths, Aldi and Hoyts Cinemas.

Located 26 kilometres north of Perth’s CBD, the centre sits on a 23.8 hectare site with potential for future mixed-use development.

Rooney highlighted the centre’s strong fundamentals, including its location in a growth corridor, secure tenancy profile and development potential.

“The value proposition for regional shopping centres has become increasingly compelling for investors, given superior comparative returns on offer, rebased sustainable income profiles and robust performance fundamentals,” he said.

The deal follows several other major retail property transactions in Western Australia, with the state seeing $1.4 billion in retail asset sales since early 2023.

Vicinity Centres will also take over property and retail development management rights for Lakeside Joondalup as part of the transaction.