Lend Lease buys Westfield's stake in Cairns Central shopping centre

Lend Lease’s Australian Prime Property Fund has acquired the Cairns Central shopping centre in its entirety after paying $261 million to buy the 50% share held by joint owner Westfield.

Westfield’s half-share in the centre was valued at $225 million on a yield of 6% in its most recent annual accounts ending June 30, 2011.

The sale to Lend Lease will generate a healthy return for Westfield, which acquired its 50% interest in the centre in October 2006 for $160 million. Lend Lease bought its share in 2001.

The 52,725-square-metre, two-level centre was put up for sale by Westfield and Lend Lease earlier this year with a price tag in excess of $450 million. The sales campaign was run by Simon Rooney of Jones Lang LaSalle with Perpetual Trustees appointed to manage the process following a four-year dispute over management of the centre.

Major tenants of the mall include Myer, Target, Coles, BI-LO, a six-screen Birch, Carroll and Coyle cinema complex, along with JB Hi-Fi and 174 specialty shops.

The shopping centre attracts around 8.8 million visitors a year with speciality store turnover at $10,200 per square metre, higher than the average for regional shopping centres, The Australian Financial Review reports.

Besides Westfield, which bid for Lend Lease’s share of the mall, other bidders for the mall including QIC while AMP Capital Investors undertook a valuation and due diligence of the centre in August this year.

The sale of Westfield’s share of the mall ends an unhappy partnership with Lend Lease – since 2007 the two companies have battled through the courts over management of the centre.

APPF’s property portfolio comprises interests in 15 shopping centres, with over 2,800 tenants and is valued at $3.7 billion. Assets include the recently upgraded MidCity centre on Pitt Street Mall in the Sydney CBD.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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