GPT to Offload Stake in ‘Super-Regional’ Shopping Centre

GPT Group’s flagship retail fund has put a half-stake in the $850-million Northland Shopping Centre in Melbourne on the block, a move tipped to start a bidding war between domestic institutions, offshore investors and wealthy developers.

GPT purchased its half share from the Canada Pension Plan Investment Board (CPPIB) in 2014 for $496 million.

The sale of the interest in the ‘super regional’ centre comes amid renewed interest in shopping centres due to stable returns and potential for mixed-use development.

Colliers and CBRE are managing the sale and expect strong interest from investors seeking exposure to Melbourne’s growing northern suburbs.

Northland, in Melbourne’s gentrifying inner north, is a highly sought-after site with strong performance and prime location.

The most recent shopping mall sale in the region was in 2018 when QIC acquired Pacific Werribee. Since then, several regional shopping centres have changed hands across Australia, including Brandon Park at Wheelers Hill, which Newmark Capital offloaded to HMC Capital for $107 million—a $27.5 million capital loss.

▲ The site sits between busy Albert Street and Murray Rd in Melbourne's growing northern inner ring.

The potential for buyers of the Northland stake is significant, as they can partner with co-owner Vicinity Centres to leverage the value of this prime parcel.

GPT’s managed fund has also sold properties in Darwin and Wollongong to non-institutional buyers, who have implemented redevelopment plans.

It continues to strengthen its retail property management platform and, despite selling some assets, the company maintains the lowest gearing in the sector, providing a buffer against rising debt costs.

Along with the wholesale shopping centre fund, GPT also manages retail mandates for several large superannuation funds. The company is capitalising on the stabilisation of shopping centre values to sell its stake and attract a wider pool of buyers.

Northland Shopping Centre, a two-level mall, is anchored by major retailers including Kmart, Target, Sephora, and TK Maxx, and a diverse range of luxury and specialty stores and is, according to Australian Property Markets News, one of the best performing Myer stores in Victoria.

The centre has a strong tenant base and a well-established reputation. The property’s development potential, including the possibility of adding residential and commercial components, further enhances its appeal to investors.

Retail is also expected to outperform other commercial property asset classes in the near term. According to CBRE, shopping centre investment is surging and forecast to grow by half again by 2025.