AMP Capital, WDC and WRT complete A$1.75bn shopping centre transaction
25 October 2012
By Asia Asset Management
AMP Capital managed funds have acquired Westfield Group (WDC) and Westfield Retail Trust’s (WRT) interest in three of Australia’s best known retail assets (Macquarie Centre in Sydney, Pacific Fair on the Gold Coast and Garden City Booragoon in Perth) for A$1.02 billion (US$1.06 billion).
At the same time, WDC and WRT have acquired AMP Capital managed funds’ interests in four centres (Garden City Mt Gravatt in Brisbane, a part interest in Warringah Mall in Sydney and Knox and Casey Central in Melbourne) for $710 million.
AMP Capital managed funds are a A$315 million net buyer of assets and following the simplification of its partnerships with WDC and WRT, the number of co-owned shopping centres is reduced from ten to four.
AMP Capital has attracted $872 million in new equity from the Canada Pension Plan Investment Board (CPPIB) and Harina Company Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA).
The new equity will be invested in the AMP Capital Retail Trust (ACRT), which has interests in Macquarie Centre and Pacific Fair. Their respective investments will allow these highly regarded international investors to participate in the growth of leading shopping centres located in high population growth areas with significant development opportunities.
AMP Capital managed funds will also invest $970 million on the redevelopment of Macquarie Centre and Pacific Fair.
The redevelopment of Macquarie Centre will begin immediately and plans for the redevelopment of Pacific Fair are being finalised. The redevelopments will create premier retail and leisure destinations, positioning both assets in the top ten of Australian leading regional shopping centres. Planning is also underway for a proposed redevelopment at Garden City Booragoon.
The redevelopments will boost the local economies, including the creation of 3,450 construction jobs and 3,000 new permanent retail jobs.
The redevelopments at Macquarie Centre and Pacific Fair are fully funded as a result of the new investors and the support of other AMP Capital managed funds and their investors.
AMP Chief Executive Officer Craig Dunn said the support from existing and new investors for the transaction is an endorsement of AMP Capital’s well-recognised property investment capability as well as a vote of confidence in the Australian retail sector.
“We have partnered very successfully with Westfield Group for over 50 years to deliver our clients superior investment returns across our shopping centre portfolio. Now is the right time to simplify our relationship to ensure we continue to deliver the best possible outcome for our investors well into the future,” Mr Dunn said.
AMP Capital will continue to manage the centres now wholly owned by AMP Capital managed funds. WDC will now manage Warringah Mall in which AMP Capital managed funds own a 50% interest. This aligns with the existing management arrangements in place at Southland, Tea Tree Plaza/Plus and Liverpool where AMP Capital managed funds own a 50% interest and WDC is the manager.
AMP Capital Director Property Andrew Bird said the transaction was proof that global and domestic capital was available if outstanding investment opportunities were on the table.
“The transaction has been developed in consultation with the new investors and existing investors across a number of AMP Capital managed funds including AMP’s A$4.5 billion flagship Australian Core Property Portfolio, the A$2.3 billion AMP Capital Shopping Centre Fund and the A$1.2 billion AMP Capital Retail Trust,” Mr. Bird said. “I’m delighted that we have received ongoing support from our existing investors as well as attracting significant new capital to our business.”
The transaction provides the opportunity to achieve enhanced investment returns following the redevelopment of Macquarie Centre and Pacific Fair into world class shopping and leisure destinations.
“The addition of these two assets expands our retail portfolio in Australia and represents a rare opportunity to acquire interests in two high quality and well located retail shopping centres with excellent future expansion and growth potential,” CPPIB Senior Vice-President Real Estate Investments Graeme Eadie said.
“These assets are aligned with CPPIB’s long-term investment strategy. AMP Capital is one of the top shopping centre managers in Australia and we look forward to building on our relationship with them in the future.”
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