Dexus Launches New Fund Series With $455M Investment in Brisbane Mall

Australian property giant Dexus Group on Friday announced the launch of a new fund series, with the inaugural vehicle to hold a quarter-stake in a Brisbane mall to be acquired for A$683 million ($455.5 million).

Dexus has exchanged contracts with retail developer Scentre Group to seed Dexus Strategic Investment Trust 1 through the purchase of a 25 percent interest in Westfield Chermside, Australia’s second-largest regional shopping centre by both sales and gross lettable area, Dexus said in a release. 

The DSIT series seeks to provide investors with access to high-quality Australian assets held for long-term value creation, according to the ASX-listed group. DSIT1’s investment follows Dexus Wholesale Shopping Centre Fund’s July acquisition of a 25 percent stake in Westfield Chermside, bringing Dexus’s platform stake in the mall to 50 percent.

“Our funds platform provides investors with access to high-quality assets across multiple strategies that align with their specific investment objectives,” said Dexus managing director and CEO Ross Du Vernet. “By working closely with our investment partners, we’re able to deliver compelling opportunities and continue to expand our platform offering.”

More Equity Incoming

Dexus will initially co-invest A$170 million in DSIT1, equivalent to a 49 percent interest, with third-party investors contributing the remainder. Additional third-party equity is expected to be introduced in 2026, targeting a long-term holding of A$50 million, Dexus said.

Westfield Chermside is located 10 kilometres (6.2 miles) north of central Brisbane and comprises 176,585 square metres (1.9 million square feet) of retail space. The mall contains 486 stores and boasts anchor tenants including Kmart, Target, Coles and Woolworths.

The acquisition of the quarter-stake in Westfield Chermside, scheduled to close on 23 December, values the property at A$2.7 billion ($1.8 billion) and A$15,471 ($10,311) per square metre, reflecting a market capitalisation rate of 5 percent, according to Dexus.

“This transaction leverages our established relationship with Scentre Group to secure a further platform investment in a market-leading asset,” said Kirrily Lord, Dexus executive general manager for retail.

Oz Retail on a Roll

The Dexus deal comes amid a red-hot market for Aussie retail complexes, with fund manager Charter Hall having acquired two regional shopping centres in recent weeks.

Last week, Charter Hall announced its A$210 million purchase of Burwood One in Melbourne’s eastern suburbs, following closely on the firm’s A$152.5 million buy of Southport Park in Queensland’s Southport.

Fellow Sydney-based fund manager MA Financial Group last week revealed its acquisition of a regional mall in the suburbs southeast of Brisbane from Queensland Investment Corporation for A$678.7 million. 

The transaction for the Hyperdome Town Centre complex in Loganholme — representing the largest-ever sale of a 100 percent interest in a Queensland regional shopping centre — built on MA’s recently announced A$393.8 million purchase from Blackstone of Top Ryde City Shopping Centre in Sydney alongside Singapore’s Keppel REIT.

In June, QIC announced its divestment of a Melbourne mall, Woodgrove Shopping Centre, to US-based PGIM Real Estate and Australia’s Assembly Funds Management in a A$440 million deal following a 28-year carry by the state-backed player.