SYDNEY, AUSTRALIA: Vicinity Centres has agreed to sell a 50% stake in Broadmeadows Central shopping centre in Victoria to Nikos Property Group for $134.5 million, marking its latest move to reshape its portfolio and reduce debt.
The deal, announced on Tuesday, values the suburban mall at a premium to its book value as of December 2022 and is expected to close on June 30, 2023.
Vicinity will retain the remaining 50% interest in Broadmeadows Central and continue to provide centre management and leasing services, as well as oversee any future development opportunities.
The transaction follows Vicinity’s recent divestments of interests in Elizabeth City Centre in South Australia, The Myer Centre Brisbane in Queensland and Corio Central in Victoria, as part of its strategy to focus on premium, destination assets and mixed-use developments.
Vicinity’s CEO and Managing Director, Peter Huddle, said the sale of Broadmeadows Central would further strengthen the company’s balance sheet and lower its gearing by about 70 basis points.
He also said the deal would enhance Vicinity’s strategic partnership with Nikos, which already co-owns Colonnades Shopping Centre in South Australia with Vicinity.
“We are delighted to further strengthen our strategic partnership with Nikos by adding Broadmeadows Central to our existing joint interest in Colonnades Shopping Centre. We are confident that our collective expertise in retail property investment will drive sustained returns for both parties,” Mr Huddle said.
He added that Vicinity had an active investment program where it was recycling and allocating capital to fund accretive retail and mixed-use developments and acquiring premium, destination assets aligned with its strategy.
“Divesting interests in selected assets where we can realise attractive pricing enables us to execute our long-term growth priorities and deliver securityholder value whilst maintaining our flexible balance sheet and strong credit metrics,” he said.
Broadmeadows Central is a single-level shopping centre located about 16 kilometres north of Melbourne’s CBD. It has a gross lettable area of 44,108 square metres and features major tenants such as Coles, Woolworths, Kmart, Target and Aldi, as well as more than 160 specialty stores.
According to Vicinity’s latest annual report, the centre had a book value of $256.5 million as of June 30, 2022 and generated $19.9 million in net property income for the 2022 financial year.
Nikos Property Group is a Melbourne-based private property investment and development company that owns and manages a portfolio of retail, commercial and industrial assets across Australia. It was founded in 1998 by Nick Andrianakos and is led by his son, George Andrianakos.