Frasers Selling West Sydney Shopping Complex to Vicinity for $289M

Singapore’s Frasers Property has agreed to sell an outlet mall-led retail complex in western Sydney to Australian shopping centre operator Vicinity Centres for A$400 million ($289 million), the company said Friday.

Strong interest in the Eastern Creek Quarter retail precinct prompted Frasers to close the marketing campaign three weeks before its 5 June deadline, said Simon Rooney, CBRE head of retail capital markets, who negotiated the sale on behalf of Frasers.

“The campaign attracted a very strong market response, domestic and offshore, private, and institutional, a very wide cross section of investors given the unique and high quality nature of the asset. The sale was concluded 3 weeks prior to the 5 June close date,” Rooney told Mingtiandi on Friday, adding “outlet malls are highly sought after and rarely traded, hence why Vicinity moved quickly when the asset came to market.”

The quick sale comes as follows a pair of recent Australian property disposals by Frasers, which has at least two more of its properties in the country on the market.  

West Sydney’s First Outlet Mall

Frasers, which began marketing the Eastern Creek Quarter last month in parallel with a campaign to sell a set of Melbourne logistics assets, attributed the rapid sale to the precinct’s popularity with shoppers in the area. 

“Eastern Creek Quarter has quickly grown into a premier mixed-retail destination and a genuine community asset, a testament to strong partnerships and considered development,” said Cameron Leggatt, chief executive officer at Frasers Property Australia, said in a statement on Friday.

Located in Blacktown, about 40 kilometres (24 miles) from Sydney’s central business district, Frasers completed the first phase of Eastern Creek Quarter in 2020 and has expanded the complex to 40,863 square metres of lettable area with subsequent phases completed in 2022 and in March of this year. The sale price equates to A$9,789 per square metre, according to Mingtiandi calculations, while no details on passing income for the complex have been released. 

The outlet centre element officially opened in March as the final stage in the precinct and features brands including ASICS, Adidas, Puma, Calvin Klein, Tommy Hilfiger, Country Road and Levi’s. The full complex is 91 percent “secured by national retailers,” according to an earlier statement from CBRE and JLL, which jointly marketed the asset. 

Vicinity Expands Portfolio

Vicinity’s purchase of the Eastern Creek Quarter marks its second major investment in an outlet  mall complex after the retail specialist picked up a 50 percent interest in Harbour Town Premium Outlets near Surfers Paradise on the Gold Coast for A$358 million in late 2021, Rooney said.

The West Sydney acquisition adds to the ASX-listed shopping mall investor’s existing portfolio of 49 retail properties under management, which include the Queen Victoria Building centre in central Sydney. 

“For some time now, Vicinity has been a selective, timely and disciplined acquirer of strategically aligned retail assets. As a hybrid retail asset that is strategically located and boasts a new Outlet centre with future development opportunity, acquiring ECQ makes sense for Vicinity,” CEO Peter Huddle said in a statement.

The transaction is expected to close by June 30, subject to landlord consent on the assignment of leases, Vicinity said.

Sale Campaign Continues

With Vicinity selecting Eastern Creek Quarter, Frasers is continuing to market Ed.Square Town Centre in Sydney, which it put on the market in March this year, and a set of five Melbourne industrial assets which brokers began promoting in April.

In April Frasers agreed to sell its 366-unit Brunswick & Co development in near Brisbane’s Fortitude Valley area for a reported A$285 million and, during the same month struck a deal to sell its Burwood Brickworks Shopping Centre in Victoria to Sydney fund manager HMC Capital for an undisclosed sum.

In October of last year Frasers sold its Australian energy retailing business, Real Utilities, to Active Utilities for A$30 million.