Singapore buys into NZ malls

Property Editor·NZ Herald·

7 Nov, 2014 12:00 AM3 mins to read

Photo / Dean Purcell

New Zealand's biggest property deal of the year has been announced with the 49 per cent sale of five Westfield malls, worth $2.1 billion, to the Singaporean Government Investment Corporation.

That is the second deal announced this week to the Singaporean entity, which also bought 49 per cent of the Viaduct Quarter which comprises Air New Zealand House, the new Fonterra development now being built by Fletcher Construction and the Viaduct Corporate Centre, containing the Vodafone, KMPG and Microsoft/HP buildings.

That controversial Viaduct sale was announced this week by Goodman Property Trust but was criticised by Winston Peters, who questioned the sale to foreigners, as well as by institutional investors, who questioned the value for trust investors.

Peter Allen, chief executive of Scentre Group, which owns the Australian and New Zealand shopping malls that were spun out of Westfield this year, said the share in Westfields at Albany, Manukau, Newmarket, Riccarton and St Lukes were sold at a 4 per cent premium to book value.

"Scentre Group will receive proceeds of approximately NZ$1036 million (A$930 million) from the transaction, which will initially be applied to repay debt. Closing is expected prior to 31 December 2014," his statement said.

Shane Solly, Auckland-based director, portfolio manager and research analyst with institutional investor Harbour Asset Management, last month predicted the Westfield mall sales, telling the Herald: "Scentre is not distressed. It does not have to sell assets, but it has the ability to sell assets where it makes sense for Scentre shareholders."

Allen's statement on the mall sales said that following the transaction, Scentre Group would own a 51 per cent interest in each of the five malls and would continue to provide property management, development, design and construction services.

The transaction remains subject to Singapore's GIC getting approval from the Overseas Investment Office in New Zealand.

The Australian newspaper also predicted the deal, saying investor demand for New Zealand institutional grade property assets remained high.

"Scentre . . . is also widely believed to be contemplating spinning off the assets into a new vehicle that will be listed on either the New Zealand stock exchange or the Australian bourse," it reported.