Lendlease, APPF Ring Up $300m Craigieburn Sale

A shopping centre with more than 6 million customer visits a year in Melbourne’s outer north has sold for $300 million, reportedly the largest retail transaction in Victoria since 2018.

The co-owners—Lendlease’s Australian Prime Property Fund Retail and Lendlease Group—offloaded Craigieburn Central to IP Generation, which has acquired about $1 billion in shopping centres since 2021.

The investment fund manager said it was its largest shopping centre purchase to date, growing assets under management to $1.5 billion.

Craigieburn Central is in one of Melbourne’s fastest-growing regions, about 40km north of the CBD. Lendlease developed the centre, which opened in 2013.

It has a gross lettable area of more than 64,000sq m where shoppers spend about $58 a trip each on average, according to the Lendlease website.

CBRE head of retail capital markets, Pacific, Simon Rooney, who negotiated the sale for the vendors, said it was the largest shop deal in the state since 2018 when Pacific Epping went for $364 million and Werribee Plaza traded for $610 million.

Nationally, it was the top price since Pacific Fair on the Gold Coast fetched $336.4 million and Macquarie Centre in Sydney went for $422.5 million, both in 2021.

Meanwhile, for a regional centre it was the strongest result since Invesco sold a half share in the Grand Plaza Shopping Centre at Brown Plains, Queensland, to EG Funds for $215 million in 2022, CBRE said.

▲ AMP sold IP Generation a half share in the Rockingham Shopping Centre for $180 million.

“The [Craigieburn] sale was a highly competitive pricing outcome for APPF Retail and Lendlease, simply reflective of the attractive inherent, long-term and deep-value fundamentals Craigieburn Central offers, valued accordingly by proactive private capital,” Rooney said.

“The retail sector is set to benefit from migration, resilient spend in the face of already high interest rates and very low new supply in the market after a period of under-investment in the sector,” he said.

APPF Retail held a 75 per cent interest in the centre, and Lendlease Group the remainder.

APPF Retail fund manager Anne MacSporran said the fund was repositioning its shopping centre portfolio to take advantage of changing consumer demands and urban growth opportunities.

IP Generation head of funds management Andrew Coutts said: “Emerging repricing within the retail property market had provided a unique setting for nimble private equity-style investors to secure core, stabilised retail assets such as Craigieburn Central on favourable pricing terms.”

The $300-million gross price for Craigieburn excludes transaction costs and settlement adjustments.

The purchase was IP Generation’s first since it picked up a half-share of Rockingham Centre in WA for $180 million.

IP Generation started its retail portfolio by buying the Corio Central shopping centre in Geelong.