Future Fund Exits WA Market with $850m Retail Sale

Future Fund has listed 50 per cent of the $1.2 billion Lakeside Joondalup Shopping Centre in Perth.

The sovereign wealth fund, which currently holds $149 billion in assets, now looks set to exit the Perth market relinquishing its share in Western Australia's most successful shopping centre.

The 99,000sq m centre is strategically positioned in one of Australia’s fastest growing regions and delivers a moving annual turnover of $707 million, the highest in the state.

The centre, in Perth’s burgeoning northern population growth corridor, is anchored by Myer, Kmart, Big W, Target, Coles, Woolworths, Aldi and Grand Cinemas, together with 12 mini-majors, 283 specialties and kiosks and six pad site tenancies.

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Investors are expected to be drawn to the regional asset class that offers opportunities for further retail and mixed-use redevelopment.

Perth’s retail market has ­attracted strong interest from landlords with a series of major shopping centre expansions under way.

AMP is currently spending $600m on ­redeveloping Karrinyup Shopping Centre and $750m on Garden City, Booragoon.

Scentre Group has plans for a $450m redevelopment of Westfield Innaloo and Vicinity has undertaken a $350m project at Mandurah Forum.

Lakeside Joondalup, which was originally developed by ING Real Estate and opened in 1994, has now been through three major expansions to become Western Australia's largest shopping centre.

The Future Fund, who co-own the centre with a Lendlease-managed fund, will now target upwards of $650 million having also recently sold its stake in Harbour Town Gold Coast for $180m.

The listing is being managed by JLL’s head of retail investments Simon Rooney, who said assets like Lakeside Joondalup remain in high-demand with $3 billion worth of regional shopping centres transacting over the last 12 months.

“Regional shopping centres in Perth are tightly held, rarely traded and are highly sought, given their high rate of sales productivity relative to similar assets in other states,” Rooney said.

The last regional centre to transact in WA was a one-third share in Karrinyup Shopping Centre, which UniSuper acquired from Westfield in 2013 for $246.7 million.

The fund, which was founded in 2006 to pay for government employee pensions, has delivered an average 7.9 per cent annual return since inception.

The fund grew 10.7 per cent to $148.8 billion for the the year to September.