Scentre Group and Barrenjoey have stepped up their shopping centre funds management ambitions by acquiring a half stake in Adelaide’s Westfield West Lakes for $174.75 million.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney exclusively negotiated the deal, on behalf of the Dexus Wholesale Property Fund (DWPF). Scentre Group remains as co-owner and property manager of the other 50% of the asset and will continue to drive its strong performance.
Scentre Group stepped into the transaction under a pre-emptive agreement, marking its second foray into funds management following the group’s June 2024 acquisition of a 50% interest in Westfield Tea Tree for $308 million.
Westfield West Lakes is the dominant food, service, and convenience-based centre within the northern area of Adelaide. It has a gross lettable area of 71,051m2 and is securely anchored by a strong performing and recently refurbished David Jones, Woolworths and Coles supermarkets, Kmart, Target and Harris Scarfe discount department stores and Reading Cinemas.
Rooney noted, “The West Lakes transaction demonstrates the resurging investor interest in larger regional shopping centres, given that these centres have already rebased their income back to sustainable levels and are now positioned for growth. We’ve seen $1.1 billion in high-quality regional retail assets recently change hands, including 50% stakes in Westfield Tea Tree, Lakeside Joondalup and Claremont Quarter, with a further $1.3 billion in deals currently in play.”
Westfield West Lakes is anchored by majors – David Jones, Woolworths, Coles, Kmart, Target, Harris Scarfe and Reading Cinemas
“Ahead of Scentre Group exercising its pre-emptive right, the Westfield West Lakes opportunity garnered strong domestic and offshore investor interest. This was underpinned by the opportunity to acquire a stake in a dominant, strong-performing regional shopping centre in Adelaide’s affluent northern suburbs. The centre offers genuine value-add potential and robust investment fundamentals, with potential buyers attracted by the quality of the asset and the long-term growth potential,” Rooney added.
The future mixed-use development potential for the property is supported by an under-utilised 20.4-hectare landmark site, strategically positioned to benefit from the adjoining WEST Development, a 36.4-hectare master-plan development set to deliver 1,300 dwellings and wider community facilities.
Major tenants report a combined $216 million in sales per annum and have a long WALE of 7.6 years by GLA. Together with the major tenants, the centre is securely leased, with major and national chain retailers representing 95% of total GLA and 91% of total gross rental income.
The centre draws 6.6 million customers annually and currently caters to a significant trade area population of over 209,930 residents, forecast to reach 232,070 residents by 2041.
The retail spend in the Total Trade Area was estimated at $2.9 billion and is forecast to strongly grow by 3.1% per annum to reach $4.6 billion by 2041.
