SPH Reit seeking 85% stake in Wollongong mall for $173m

SPH Reit Management is proposing to acquire an 85 per cent stake in a shopping centre south of Sydney for A$175.1 million (S$173 million), it said yesterday.

The deal - SPH Reit's first foray overseas - will be financed through a combination of debt and internal sources, it added.

Figtree Grove Shopping Centre is 3.7km south-west of central Wollongong, a coastal city about 70km south of Sydney known informally as "the Gong" and traditionally dependent on steel, mining and manufacturing.

The mall has a total gross lettable area of 21,984 sq m with 940 carpark spaces, a 24-hour Kmart, Coles and Woolworths supermarkets as well as 72 speciality stores, among other shops and services.

The freehold property sits on a 50,900 sq m plot and is priced at A$206 million, said SPH Reit.

The centre is "well positioned to serve the key growth areas in central Wollongong and the south-western suburbs of Wollongong", it added.

SPH Reit Management chief executive Susan Leng said: "The acquisition of Figtree Grove Shopping Centre is a strategic fit with SPH Reit's portfolio of quality assets and in line with our strategy to expand our footprint into Australia."

She added that it is expected to provide "stable and growing income" to SPH Reit unit holders.

The mall has an occupancy rate of 98.5 per cent and records total retail sales of A$10,551 per sq m - 47.7 per cent above benchmark for malls in the same category, said SPH Reit.

The acquisition will be done through Figtree Holding Trust, a wholly owned subtrust of a joint venture held by SPH Reit and entities managed by the asset management division of financial services group Moelis Australia.

The joint-venture trust is held by SPH Reit and Moelis' entities in the proportion of 85:15.

Figtree Grove serves a total trade area of about 207,000 residents which is expected to grow to about 229,000 over the next decade.

A version of this article appeared in the print edition of The Straits Times on December 19, 2018, with the headline 'SPH Reit seeking 85% stake in Wollongong mall for $173m'. Print Edition | Subscribe