Scentre Group sells off four malls

Scentre Group sells off four mallsPosting a $1.08 billion half-year profit, Scentre Group has announced the $783 million sale of four Australian shopping centres that did not meet the company’s strategy to own and operate a ‘premier retail portfolio’.Blackstone Real Estate Asia has purchased centres at Figtree and Warrawong in New South Wales, and Strathpine in Queensland. Challenger has purchased the North Rocks centre in Sydney.Gross proceeds will be $783 million, representing a 3.4 per cent premium to the June 2015 book values. Proceeds from the sale of these assets will be reinvested in Scentre Group’s development pipeline.Scentre Group, which operates the Westfield malls in Australia and New Zealand, says that its strong underlying operating performance will offset the dilutionary earnings impact of the sales. This will enable Scentre Group to maintain its 2015 full year funds from operations forecast of 22.5 cents per security, representing 3.5 per cent growth.Scentre Group’s chief executive officer Peter Allen (pictured) says the results “reflect the focus of driving value from our high quality shopping centre portfolio”.”In addition to having 14 of the top 20 shopping centres in Australia by annual sales, each of Bondi Junction and Westfield Sydney now generate annual sales in excess of $1 billion,” Allen says.According to Scentre Group’s chairman, Frank Lowy, the business is operating efficiently and “the underlying strength and quality of the assets mean the future prospects for Scentre Group remain promising.”Scentre Group has $40.7 billion of assets under management, and a strong balance sheet with total assets of $31.0 billion.