Vicinity Centres has paid $319 million for The Shops At Ellenbrook and Livingston Marketplace, two suburban shopping centres put up for sale by the Insurance Commission of Western Australia earlier this year.
The deals are expected to settle early next year, with Vicinity to pay $231 million for the Ellenbrook centre, and $87 million for the Livingston shops, which are located in Canning Vale, inclusive of all acquisition costs.
Vicinity is expecting internal rates of return of more than 9 per cent on the two centres.
The acquisitions will be debt funded, the company said.
Vicinity Centres managing director Angus McNaughton said the acquisitions were consistent with the company’s portfolio strategy.
“Both centres are located in trade areas characterised by strong population and retail expenditure growth over the medium term to long term, and have high specialty sales productivity and low occupancy costs,” he said.
“Both assets have development potential which will strengthen their positioning in their catchments over time.
“This is particularly the case with The Shops At Ellenbrook, which includes 6.5 hectares of adjoining land as part of the transaction.”
ICWA chief executive Rod Whithear said Vicinity would now manage construction of a new centre at The Shops at Ellenbrook, to allow for discount supermarket Aldi.
Mr Withear said the sale proceeds would be reallocated to other assets within its investment portfolio.
"The Insurance Commission continues to work through offers for the office buildings in its investment portfolio and expects to make an announcement in the coming weeks," he said.
