Scentre Group (ASX: SCG) today announced the Perron Group will be a new 50% joint venture partner in Westfield Burwood in Sydney. Perron Group will pay $575 million for its interest, representing a 4.1% premium to Scentre Group’s book value at 31 December 2018. Today’s announcement demonstrates there is strong demand for the highest quality retail assets in Australia.
Westfield Burwood is centrally located within Sydney’s Inner West, approximately 12 kilometres from the CBD. Strategically positioned within easy reach of Burwood Railway Station on the bustling commercial strip, the centre caters to a trade area population in excess of 464,000 residents. In the 2019 SCN Big Guns report the centre is ranked 43rd in Australia with total retail sales of close to $500 million and customer visitation of more than 14 million per annum. The centre’s size is 63,248m2 (GLA) and its specialty sales are $11,591/m2.
Perron Group CEO Ross Robertson said: “We are excited by the unique opportunity to invest in one of the highest quality shopping centres in Australia. Westfield Burwood is one of the top 50 shopping centres in Australia with customer visitation of more than 14 million per annum and total retail sales of close to $500 million.”
Westfield built the centre and opened it in 1966. At the time, it was praised as one of the most beautiful indoor shopping centres in the world. It was the first shopping centre with a major department store and was the first centre to be branded with the Westfield logo. It was rebuilt in the late 1990s and reopened in 2000.
Scentre Group CEO Peter Allen said: “We are pleased to extend our long-standing relationship with the Perron Group into Westfield Burwood. This transaction highlights the value of Scentre Group’s extraordinary platform of 41 Westfield living centres. The proceeds will provide the Group with further capital to pursue our strategic objectives of creating long-term value for securityholders.”
The transaction was brokered by Colliers International Head of Retail Investment Services Lachlan MacGillivray. Proceeds from the transaction will initially be used to repay debt. The transaction is expected to be dilutive to FFO per security in 2019 by approximately 0.2 cents per security.
Scentre Group and Perron Group have a longstanding joint venture relationship – in addition to Burwood, Westfield living centres where Perron has a 50% stake include Westfield Woden (Canberra, ACT), Westfield Airport West (Melbourne, Victoria) and Westfield Geelong (Geelong, Victoria). Scentre Group will continue to manage Westfield Burwood.
