Vicinity Centres has agreed to acquire a 50% interest in Uni Hill Factory Outlets in Victoria from MAB Corporation for $67.8 million, while MAB Corporation will retain a 50% interest in the asset. Vicinity also announced the divestment of its 50% interest in Lennox Village in New South Wales for $31.5 million to joint-owner Challenger, in a simultaneous exchange and settlement on 11 December 2019.
Grant Kelley, CEO and Managing Director, said: “These transactions reflect the continuation of Vicinity’s strategic portfolio refinement and focus on market-leading destinations, through the divestment of non-core assets and reinvesting those proceeds into value-accretive acquisitions and developments.
“Uni Hill is a well-established outlet centre located in Bundoora, a strongly growing catchment in Melbourne’s northern suburbs, with population growth expected to average 2.0% per annum over the next 5 years. With high specialty store moving annual turnover (MAT) growth of 4.1% and low occupancy costs of 9.8%, we believe there is scope to drive further income and capital value growth as we have done with our outlet centres across the portfolio.”
Kelley said, subject to receiving ACCC approval, Uni Hill would be a great addition to Vicinity’s successful DFO platform, with Vicinity becoming property and development manager of the asset and adopting the DFO brand for the centre.
The proposed acquisition price of Uni Hill reflects a capitalisation rate of 6.5%.
Uni Hill opened in 2008, expanded in 2014, and attracts more than 2.5 million visitors per annum. The retail centre comprises five mini majors and 94 specialty tenancies across 19,580m2 of gross lettable area and has parking for 900 vehicles.
The acquisition is subject to ACCC approval, with settlement expected in the second quarter of 2020. The acquisition includes two parcels of land (totalling 9,400m2) and excludes transaction costs.
Vicinity’s FY20 interim results will be announced on Wednesday 19 February 2020.