Vicinity sells eleven shopping centres for $631 million

Vicinity Centres has announced a progress update asset divestment program, with the sale of a portfolio of 10 sub regional and neighbourhood shopping centres to SCA Property Group.

They also sold one Neighbourhood shopping centre to a private investor, for an aggregate sale price of $631.0 million.

The aggregate sale price of $631.0 million reflects a 5.1% discount to the combined 30 June 2018 book values of the eleven assets and a weighted average capitalisation rate of 6.9%.

Vicinity has now divested 35 shopping centres for more than $2.5 billion at a 0.5% premium to book value.

Discussions are noted to be underway with prospective purchasers of three remaining assets included in Vicinity’s divestment program.

Mr Grant Kelley, Vicinity’s CEO and Managing Director, said “These transactions are a significant achievement and advance our strategy to unlock major potential in the business.”

“It is an important step in delivering strong and sustainable growth through focusing our directly-owned portfolio on approximately fifty market-leading destination assets, expanding our wholesale funds platform and realising mixed-use opportunities across the portfolio.”

SCP will acquire ten assets for a total consideration of $573.0 million. Settlement of these transactions is expected later this month.

The sale of Belmont Village (pictured above) in Victoria to a private investor for $58.0 million was settled at the end of September .

As at 30 June 2018, the eleven assets sold had specialty sales per square metre averaging $7,611. 

Vicinity’s FFO guidance for FY19 remains unchanged at 18.0 to 18.2 cents per security.

Assuming the sale proceeds of the eleven non-core assets are used to repay debt in the short-term, gearing would be reduced by approximately 280 basis points.