Vicinity Centres has announced plans for the sale of up to $1 billion of sub-regional and neighbourhood shopping centres.
The Melbourne-based investment trust currently holds approximately $6.9 billion worth of shopping centres around Australia and plans to reinvest these sales into future development opportunities.
The ASX-listed company made the announcement on Monday morning, with sale proceeds from its non-core portfolio to be reinvested in flagship development opportunities.
“Following an extensive review of our portfolio, it is clear that we need to focus our resources on creating destinations that provide market-leading shopping, dining and entertainment experiences," Vicinity managing director Grant Kelley said.
"Accordingly, we are divesting up to $1 billion of non-core assets to fund the acceleration of our strategy."
Vicinity has hired JLL as its real estate adviser and Macquarie Capital as its corporate adviser on the asset sales program.
“The proceeds will be reinvested into transformative developments, including The Glen and Box Hill Central in Melbourne; Galleria in Perth; and Chatswood Chase and Bankstown Central in Sydney; and additional value-accretive development opportunities," Kelley said.
The announcement signals Vicinity's need to protect profits as retail owners face growing competition from online retailers.
Related reading: Food Gallery Adds to Vicinity’s Retail Offering at The Glen
The Vicinity centre, The Glen, will be retained by the retail landlord and is set to received three new towers and up to 555-apartments.
Jeff Xu's Golden Age Group secured the air rights to develop above The Glen in 2017, with plans to build a $450 million elevated residential project.
Related reading: The Glen Mall gets $500 Million Dollar Redevelopment
Golden Age Group announced plans for "Sky Garden", an ambitious retail-anchored apartment precinct earlier this year.
The developer says the new apartment towers, ranging from 12- to 20-storeys, will compliment the $460 million redevelopment of The Glen already under way.
“We saw an opportunity to partner with Vicinity Centres and deliver a residential component to an existing shopping precinct in a way that’s never been done before, making this project the first of its kind,” Golden Age's managing director Jeff Xu said.
The residential towers are designed by Rothelowman architects, with interiors by DKO Architecture and landscaping by Aspect Studios.
Construction of the three Sky Garden towers is slated to commence mid-2019 and be completed by early-2020.