Australia’s oldest property trust,
GPT Group, has confirmed the sale of its 50 per cent stake in the $800 million Erina Fair shopping centre, on the NSW Central Coast, for $397.1 million.
GPT’s stake in the shopping centre was sold to the $300 billion National Pension Service of Korea, a Lend Lease Investment Management client, at a one per cent premium to GPT’s December 2012 fair value.
This comes as South Korean groups are expected to secure up to $1 billion worth of Australian real estate in the coming weeks.
Australian Prime Property Fund – Retail owns the remaining 50 per cent of the asset, which is managed by Lend Lease.
CEO and Managing Director Michael Cameron said GPT had capitalised on the strong interest from domestic and overseas investors in quality Australian property assets.
“This solid demand has allowed GPT to realise the value of this asset and continue to progress its strategy to move to a more balanced portfolio weighting,” Mr Cameron said.
Erina Fair, which is the biggest centre on the Central Coast, was sold through Simon Rooney, the head of retail investments in Australasia for Jones Lang LaSalle.
Mr. Rooney said the deal reflected the liquid capital markets in Australia backed by increasing demand from wholesale and superannuation investors.
Furthermore, Mr. Rooney believes offshore pension and sovereign wealth funds were looking to increase their exposure to direct real estate in Australia.
''Since the start of 2011, these investors have acquired $5.7 billion worth of major retail assets at or above book value,'' Mr. Rooney said.
South Korea's giant National Pension Service has had considerable interest in the Australian market in recent years, with the acquisition of the Sydney skyscraper, Aurora Place, for $685m in 2010, and has shown interest in several other investments, including the $2bn Sydney Desalination Plant and toll road operator ConnectEast.
GPT Group is set to use the $397.1 million received from the sale to expand its office and industrial/business park investments.
The group has gradually been reducing its half-share interests in retail to expand its bigger shopping centres, such as Melbourne’s Highpoint, through high-end redevelopments.