Vicinity banks $195.5 million selling Geelong and Brisbane retail assets

CBRE’s newest recruit, star agent Simon Rooney, will be writing up his first commission after selling two non-core retail assets for Vicinity Centres.

Vicinity chief executive officer and managing director, Grant Kelly, said the disposal of the “non-core” Corio Central in Geelong, and a 25 per cent interest in the Mt Ommaney Centre in Brisbane, “is in line with our strategy of focusing our portfolio on market-leading destinations” – meaning its larger assets.

Corio Central, Geelong

Corio Central includes 31,503 square metres of lettable area and sits on an 8.7 hectare block (outlined).

In the largest deal, Chris Lock’s IP Generaton is paying $101 million for Corio Central in the regional Victorian town of Geelong.

The price is a 3.8 per cent discount to the June, 2019, book value.

When Mr Rooney listed the investment in May it was expected to trade for about $115 million.

The acquisition comes four months after IP Generation sold a woolstore-converted-office at 90-96 Maribyrnong Street, Footscray, to Sydney-based Planum Partners for $33.1 million.

Last September, the company paid more than $15 million for Quiksilver’s outgoing Torquay headquarters – a modern commercial building with showroom, office and warehouse space, and surplus land for development.

Mt Ommaney Centre, Brisbane

Vicinity also announced today that it has sold a 25 per cent stake in the Mt Ommaney Centre in Queensland – for $94.5 million.

YFG Shopping Centres Pty Ltd – as trustee for the YFG Trust – is expected to settle on the deal this month.

This sale price reflects a 3.3 per cent premium to its June, 2019, book value.

Mt Ommaney is about 14 kilometres south west of the Brisbane CBD.

Vicinity’s balance sheet post-sales

“The transaction will further strengthen our balance sheet, with around a 90 basis point reduction in gearing, with the proceeds assumed to repay debt in the short term,” Mr Kelly said.

“Over the medium term, we expect to drive additional value for securityholders through investing the sale proceeds into accretive developments of our strongly performing centres, acquiring destination assets aligned with our strategy, or by acquiring Vicinity securities at accretive pricing.”

The executive added that the sales are the continuation of a strategic portfolio refinement.

YFG Shopping Centres is paying Vicinity $94.5 million for Brisbane’s Mt Ommaney Centre.

Vicinity has divested interests in 37 non-core assets for $3.3 billion at a combined 0.7% premium to book value, Mr Kelly said.

“These proceeds have been used to create additional value for our securityholders through $1.1 billion of acquisitions, up 12.3% in value since acquisition; $0.5 billion of securities buy-back at an 11.1% discount to June 2019 NTA2; and $1.0 billion of developments which have delivered a 12.5% uplift on completion.

“Consequently, adjusting for these divestments, Vicinity’s portfolio has a 76% greater average asset value and 35% stronger comparable specialty store sales productivity. Our strategy focused on creating and investing in market-leading destinations is delivering results.”

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of