Lend Lease’s investment management arm has put $500 million worth of shopping centres on the block as it winds up the unlisted Lend Lease Real Estate Partners 3 fund.
The group will shortly appoint agents to market a portfolio of five subregional shopping centres in the unlisted wholesale fund in the largest retail offering of the year.
The fund, launched in February 2010, includes centres across NSW and three in Western Australia.
The centres will be offered with management contracts, which should make them appeal to active players like CFS Retail Property Trust Group, which has a wholesale fund specialising in the area, Charter Hall Group and financial services group Challenger.
Offshore players like private equity giant Blackstone and even Brookfield Asset Management have been scouring the market for portfolios.
While the assets might attract a premium in one line they are also likely to be sought by individual buyers.
The WA centres are the $170m Armadale Shopping City in Perth, the $60m Northgate Shopping Centre in Geraldton and the $90m Southlands Boulevarde centre in Perth. The NSW centres are the $120m Settlement City in Port Macquarie and the $100m Menai Marketplace in Sydney.
The managing director of Lend Lease’s investment management business in Australia, Kylie Rampa, said that given the current strong demand for subregional shopping centres and the high quality of the portfolio, it was an opportune time to explore divestment.
“The marketing of the portfolio reflects Lend Lease’s active management of the fund in order to maximise investor value, in line with the investment mandate when the fund commenced,” she said.
“Any sale will be subject to achieving a satisfactory price for the portfolio which is expected to be highly sought after by both domestic and offshore investors.”
The portfolio was valued at $457m in June last year but yields on shopping centres have compressed and the sale is expected to be completed ahead of a refinancing deadline in August.