AMP Capital, the Sydney-based investment manager, has led a club of investors comprising the Canadian pension plan Canada Pension Plan Investment Board (CPPIB) and United Arab Emirates sovereign wealth fund Abu Dhabi Investment Authority (ADIA) in the acquisition of large interests in two of Australia’s best known shopping centres.
The stakes were bought from the global retail property development giant Westfield Group.
CPPIB and ADIA have each invested A$436 million (€348.4 million; $452.87 million) into the AMP Capital Retail Trust, a vehicle which holds a 50 percent stake in Sydney’s Macquarie Centre and an 80 percent stake in Gold Coasts’ Pacific Fair.
CPPIB’s senior vice president, real estate investments, Graeme Eadie, said the two properties had excellent future growth and expansion potential. “The properties are aligned with CPPIB’s long-term investment strategy to hold core assets over a long period. 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.”
For CPPIB, the acquisitions of interests in the Macquarie Centre and Pacific Fair shopping centres expand its exposure to Australian retail from investments in a 50 percent interest in Northland Shopping Centre in Melbourne and a 41.6 percent interest in CFSGAM Property Retail Partnership, a trust that owns eight shopping centres across Australia.
AMP Capital will also invest a further A$970 million redeveloping Macquarie Centre and Pacific Fair, the former of which will begin immediately. It will also manage the properties on the trust’s behalf.
The Macquarie Centre will be expanded to about 1.45 million square feet of gross leasable space. When completed it will be the second largest shopping centre in Sydney.
Plans are still be finalised for the redevelopment of Pacific Fair although this is expected to be completed by 2016. Then it is expected to have 1.56 million square feet of gross leasable space.
For AMP Capital’s part, the investments were part of a wider set of transactions aimed at “simplifying” its relationship with Westfield.
The developer and one of its trusts, the Australia and New Zealand –focused Westfield Retail Trust, have simultaneously bought AMP Capital out of interests in four other shopping centres in Brisbane, Sydney and Melbourne in deals worth A$710 million collectively. Following these deals, the number of joint ownerships between the two groups has been reduced from 10 to four.
AMP Capital has also purchased a 25 percent stake in the Garden City Booragoon shopping centre for A$227.8 million in Perth and intends to invest in its redevelopment too.
Macquarie Capital advised AMP Capital and acted as sole lead manager and arranger for the capital raising.