QIC, the Australian institutional investment manager, continues to bet on American shopping malls with three recent purchases through an established partnership with real estate investment trust Forest City Realty.
Australia’s second largest money manager, which managed A$78.8 billion (€51 billion, $57 billion) in assets as of December 31, said Tuesday that it bought a 51 percent stake in a suburban New York shopping center from Forest City Realty. PERE has learned that QIC’s majority ownership stake is valued at about $250 million, giving Forest City about $90 million in profits. The REIT will hold onto its 49 percent stake in Westchester's Ridge Hill, a 1.3 million square foot regional mall that it developed in Yonkers, New York.
Brisbane-based QIC is also buying stakes in two other Forest City properties in Arlington, Virginia and outside of Tampa, Florida, sources told PERE. Those transactions are expected to close in four to six weeks. The total value of the three properties, including the Westchester mall, is $750 million, and QIC’s stake is worth about half the gross value. Terms of the three deals, however, were not disclosed.
Forest City and QIC have partnered on previous US malls, with eight joint ventures located across the country, from Pennsylvania to California. QIC has invested about A$13.7 billion in Australian and international retail and offices, according to the Tuesday announcement.
The Ridge Hill acquisition “further diversifies QIC’s existing US retail property portfolio, providing a unique opportunity to take a strategic stake in a quality retail asset within a tightly held institutional asset class, and provides even further geographic exposure to the US East Coast,” said Steven Leigh, QIC’s managing director, in a statement Tuesday. “We view the US retail market as being very attractive, and our existing portfolio is achieving good income growth off the back of robust retail sales, coupled with a sustained low interest rate environment.”