Scentre Group's shopping mall sell-off

Scentre Group is putting another of its Westfield malls on the market.

It is selling the 36,274m² Westfield Westcity at Henderson.  The mall has a book value of $161.5 million.

This comes after ASX-listed Scentre Group last week sold three malls for $549 million.

Glenfield mall in Auckland was bought by Ladstone Holdings, while Queensgate mall in Lower Hutt and Chartwell mall in Hamilton were sold to the Stride Property-managed Diversified NZ Property Fund, which is for offshore institutional investors. 

The mall sales to Stride are subject to approval from the Overseas Investment Office and the acquisitions are expected to close in the first half of next year.  

Colliers International, which brokered the deals, says the sale of Queensgate and Chartwell malls transacted at a blended yield of 8.2% and Glenfield was at more than 9%. It was the single biggest transaction in Colliers history and took a year to conclude. 

Capital markets director Andrew Reed says Scentre Group has been considering selling some of its assets for a number of years.

Earlier this year Harbour Asset Management analyst Shane Solly said the sales are not a reflection on the group's attitude to New Zealand but a changed group-wide strategy to own regional malls rather than sub-regional – for example, Sylvia Park (which it doesn't own) rather than Pakuranga.

One is a destination mall where people will travel large distances to go to, while the other tends to be where the locals pop down to when they want to top up on something, he said.

"They've focused on what they see are the better opportunities and are selling their smaller assets that don't fit the strategic bill," Mr Solly said.

Scentre Group, which operates 47 malls in Australia and New Zealand, was set up at the end of June 2014 following the merger of the Australian and New Zealand operations of Westfield Group with the Westfield Retail Trust. 

If you are travelling by Air New Zealand this week, remember Koru Lounge wi-fi provides you with FREE access to NBR ONLINE premium content.