Scentre, Dexus Strike $683m Westfield Chermside Deal

Scentre Group has sold a 25 per cent interest in Westfield Chermside to the Dexus Wholesale Shopping Centre Fund for $683 million in an off-market transaction.

The Brisbane shopping centre, 20 minutes north of the CBD, ranks as Australia’s second-largest regional shopping centre by sales and gross lettable area.

Scentre Group is to retain property, leasing and development management responsibilities under the joint venture.

Scentre Group chief executive Elliott Rusanow described sourcing new capital through joint ventures as “a key part of the Group’s capital management strategy”.

The transaction reflects Scentre Group’s book value at June 30, 2025 and uses a capitalisation rate of 5 per cent, indicating the sale achieved fair market pricing with no discount to the company’s internal asset valuation.

Rusanow said that since the pandemic, the group had been “successful in sourcing funding through innovative and various sources, without diluting security holder equity”.

The deal prompted Dexus to increase its investment in the retail fund by $170 million, taking its total commitment to $300 million.

Dexus executive general manager for funds management Michael Sheffield said the “exclusive off-market transaction leverages our established relationship with Scentre Group to secure a market-leading asset for DWSF”.

Scentre Group confirmed its target for funds from operations of 22.75 cents per security for 2025, at 4.3 per cent growth.

The group expects distributions to grow by 2.5 per cent for 2025 to 17.63 cents per security, with results for the six months to June 30 scheduled for release in late August.

Rusanow said “the proceeds from this transaction will provide the group with further capital to pursue our strategic objectives of creating long term value for securityholders”, reinforcing Scentre’s focus on capital management through joint venture partnerships while maintaining operational control of its premium assets.

The Westfield Chermside deal is the latest collaboration between Scentre and Dexus as the companies diversify beyond core retail operations.

Another joint venture secured approval in April for a $38.5-million residential development in Perth’s Ardross, forming part of Scentre’s strategy to build housing around its shopping centres.

The companies have maintained an active trading relationship, with Scentre and Barrenjoey Private Capital acquiring Adelaide shopping centres from Dexus funds in two separate deals worth $482.75 million—Westfield Tea Tree Plaza for $308 million in June 2024 and Westfield West Lakes for $174.75 million in September 2024.