Assets under management by NZX-listed Stride Property will shoot from $1.3 billion to almost $1.8 billion after it takes over running two big New Zealand malls.

Stride chief executive Peter Alexander said yesterday that his business would manage the Lower Hutt and Hamilton malls, sold by ASX listed Scentre Group for $445 million, conditional on Overseas Investment Office consent.

Scentre on Friday also said it had sold Westfield Glenfield to a separate business, Ladstone Holdings.

Alexander said Diversified NZ Property Fund's purchase of the Lower Hutt and Hamilton malls vastly increased the value of Stride's funds under management.


"The deal has grown our funds under management business, from $1.3 billion to $1.8 billion. That's the value of assets we manage, whether we own them directly or whether we manage them externally.

"We will be taking on extra staff, looking at the existing centres' management staff. We've got to go through a process," Alexander said of the malls with 310 shops.

Stride already manages three retail assets for the unlisted Diversified.

Lower Hutt's Westfield Queensgate has 180 shops, while Hamilton's Westfield Chartwell has 130 shops.

"They're well managed, stabilised centres so it will be business as usual but there will be minor changes over time,'' Alexander said. "There won't be a major expansion but we will do small things to add value."

Diversified is a wholesale investment vehicle 98 per cent owned by two Australian superannuation funds and 2 per cent owned by Stride which will now manage those malls.

Alexander said that was a big change for Stride.

"It's been a huge year for us," he said referring to the opening of the 100-shop NorthWest mall at Westgate and extensive supermarket property purchases.

"This year, our estate has grown by $960 million." Alexander said.

Diversified had also looked at the Glenfield mall but the other two assets were considered more attractive.

"Queensgate is quite dominant in its catchment. There's a really interesting growth story in Hamilton, which has a lot of retail but it's growing. There's three main centres there but major infrastructure investment with the new motorway and some exciting things happening in the Waikato and we see that as the long-term driver," he said.

Chris Wilkinson of consultancy First Retail Group praised Scentre but said its decisions were increasingly made at a global level, not local.

"We believe Stride will deliver a far more localised approach, enabling a more dynamic response to opportunity and risk. This is very necessary given the highly fluid state of the retail sector," Wilkinson said.

"Fast decisions, differentiation and flexibility are all key in maximising performance currently. It's all about agile. The centres they have purchased will all perform better if the company refocuses on once again making them at the heart of their communities. We would anticipate this being a key strategy in the first few months of new ownership from our perspective."

Stride might stamp a new individuality on the two malls, because although the company was relatively small in the Australasian market, it might take some " calculated chances in terms of tenancies, such as encouragement of much-needed retail succession in what's becoming an otherwise homogeneous mall offering", Wilkinson said.

Ladstone, whose directors are Dallas and Ross Pendergrast, previously owned the Pakuranga Plaza, which it sold to GYP Properties of Asia for $96 million.

Shane Solly of Harbour Asset Management said the mall deal was a big boost for Stride and a good transaction for Scentre which would use the proceeds to partially pay down Australian debt securities which were relatively expensive.