SPH Reit proposes acquisition of 85% stake in Australian shopping centre

The deal to acquire an 85 per cent stake in Figtree Grove Shopping Centre, about 3.7km south-west of central Wollongong, will be financed through a combination of debt and internal sources.
The deal to acquire an 85 per cent stake in Figtree Grove Shopping Centre, about 3.7km south-west of central Wollongong, will be financed through a combination of debt and internal sources.PHOTO: COLLIERS INTERNATIONAL AUSTRALIA

SINGAPORE - 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$175.1 million), it announced on Tuesday (Dec 18).

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

Figtree Grove Shopping Centre is about 3.7km south-west of central Wollongong, a coastal city about 70km south of Sydney.

It 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 other specialty stores and services.

The freehold property, which is priced at A$206.0 million, sits on 50,900 sq m.

SPH said the centre is "well-positioned to serve the key growth areas in central Wollongong and the south-western suburbs of Wollongong".

SPH Reit Management chief executive Susan Leng said on Tuesday: "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.

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

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.