Scentre Proceeds with $634M Brisbane Mall Stake Sale

Scentre Group is proceeding with the sale of a half-stake in a Brisbane mall to Australian Retirement Trust for A$882.5 million ($633.7 million) after the pension fund obtained clearance from the competition regulator.

ASX-listed Scentre, Australia’s biggest mall owner, said Wednesday that the transaction for Westfield Mt Gravatt had cleared its final condition and was scheduled to close before 30 September. The deal comprises A$870 million for a 50 percent direct interest in the shopping centre at a 5.5 percent capitalisation rate and A$12.5 million for half of an adjacent land parcel.

The pricing implies a A$1.74 billion valuation for the mall and A$25 million for the land, with the total consideration representing a 3.5 percent premium to the assets’ December 2025 book values. Scentre will retain the remaining half of Westfield Mt Gravatt and continue as property, leasing and development manager.

“Introducing new capital, through joint venturing our assets, forms a key part of our long-term strategic plan,” Scentre CEO Elliott Rusanow said in announcing the agreement on Monday. “In the last 13 months, we have announced approximately A$3.1 billion of new third-party capital coming into the group through the joint venturing of our assets.

Partner Capital Climbs

Located 12 kilometres (7.5 miles) south of central Brisbane, Westfield Mt Gravatt spans 141,699 square metres (1.5 million square feet) and serves a trade area of over 1.2 million residents. The centre recorded 17.4 million customer visits and A$1 billion in retail sales last year.

The property houses 376 tenants, including Myer, Kmart, Target and Coles. Scentre completed an upgrade in 2024 that converted the former David Jones department store into space for Uniqlo, Harris Scarfe, other fashion retailers and a new entertainment precinct.

The Mt Gravatt sale lifts the capital introduced through Scentre’s recent asset joint ventures to A$3.1 billion. That tally includes two 25 percent stakes in Brisbane’s Westfield Chermside sold to Dexus-managed vehicles for A$683 million each last year.

ART’s latest purchase follows the superannuation fund’s A$864 million acquisition of a 19.9 percent interest in Westfield Sydney, which closed in February at a 4.69 percent cap rate. Queensland state investor QIC manages ART’s interest in the Sydney complex and will perform the same role at Mt Gravatt, while Scentre retains operational management of both assets.

The A$375 billion retirement fund invested a record A$3 billion in Australian property during fiscal 2026 and committed a further A$2.2 billion. Its recent activity includes the acquisition of a 48.5 percent interest in the A$1.7 billion LIV Mirvac Fund, which owns 2,200 build-to-rent apartments across Brisbane, Sydney and Melbourne.

Green Light for Milestone

On a 100 percent basis of A$1.74 billion (excluding the land portion), the Mt Gravatt deal is valued at A$12,280 per square metre of gross lettable area. ART has described the purchase as set to be Australia’s largest single-asset retail transaction completed this calendar year.

“At ART, we believe there is opportunity in the retail property market in Australia to generate strong long-term returns for members,” said Michael Weaver, the fund’s general manager of mid-risk assets.

The Australian Competition & Consumer Commission had considered whether ART’s growing mall holdings, managed by QIC, and Scentre’s continuing operational control could reduce competition among shopping centre owners for tenants.

By granting a waiver, the ACCC effectively found the transaction unlikely to substantially lessen competition, allowing it to proceed without a fuller review or remedies.

Retail Rolls On

The regulatory clearance came as Vicinity Centres agreed to sell two smaller retail properties to MA Financial Group for a combined A$169 million, according to a Wednesday announcement by broker CBRE.

The transactions comprise Brisbane’s Taigum Square for A$120 million and Eastern Creek Quarter Large Format Retail in western Sydney for A$49 million, with both expected to settle in September. CBRE head of retail capital markets for the Pacific Simon Rooney represented Vicinity in the two sales, which recycle capital from non-core holdings while expanding MA’s retail platform.

“The divestment of Taigum Square reflects robust investor demand for quality sub-regional shopping centres that dominate their local catchments,” Rooney said.

Located 15 kilometres north of central Brisbane, Taigum Square provides 22,470 square metres of gross lettable area and is anchored by Woolworths and Big W. The 98.9 percent-occupied centre has more than 59 specialty stores and kiosks, annual turnover of A$140 million and 1,072 parking spaces.

The 11,000 square metre ECQ XL was completed in 2022 as the second stage of the Eastern Creek Quarter development. Tenants include Officeworks, 4WD Supacentre, Anaconda and RSEA Safety, while McDonald’s and KFC occupy pad sites at the property near the intersection of the M4 and M7 motorways.