Shopping centre giant quits NZ properties

Scentre has plans to hugely expand Westfield St Lukes. Photo / Jason Oxenham

Scentre sells off large portion of its holdings in New Zealand cities.

An associate of the world's biggest shopping centre owner and manager has vastly reduced its holdings here, from owning a vast group of 12 malls to only one fully owned.

Scentre - previously branded Westfield and connected to that giant organisation - was once by far the dominant mall business.

Now, the only mall it fully owns is Henderson's Westfield WestCity and even that $161.5 million is going up for sale. Scentre still owns 51 per cent of malls at Albany, Manukau, Newmarket, Riccarton and St Lukes but has been quitting assets here fast.

In March, it sold a 49 per cent stake of those five malls to GIC, the Singaporean Government's sovereign wealth fund.

Scentre owns and manages the Westfield malls in New Zealand and Australia. It has A$40 billion worth of assets and the brand is connected to Westfield Corporation, the world's biggest mall owner/manager.

Just last month, it sold a further three malls, quitting 100 per cent of the Westfield-branded Glenfield, Chartwell and Queensgate properties.

So its activities lately are a huge and relatively unnoticed shrinking exercise, following a period of some expansion a few years ago.

A Scentre spokeswoman said it would be wrong to think the business did not have a big commitment to New Zealand.

"Right now, we still manage about $2.9 billion worth of property and even with the recent sales, we still are classed as one of the largest New Zealand shopping centres and managers. We're committed to the New Zealand market as a group," she said.

Even though 49 per cent of the five malls was sold earlier this year, Scentre was still the 100 per cent manager of all those centres, she stressed.

Forming joint ventures on ownership was not new to the business where in Australia it had teamed up with big investors to develop and build new centres, she said. "So it's not uncommon for us to work in JV."

Scentre wants to double the size of Westfield St Lukes, unpopular amongst neighbours or Auckland councillors who fear the effects on surrounding neighbourhoods and strip shops.

It says future development opportunities "have the potential to substantially increase assets under management and reinforce its role as the leading retail property manager in New Zealand."

The Australian mall owner has been in New Zealand for nearly 19 years. Westfield, as it was previously known, arrived here in April 1997, initially running shopping centres for St Lukes Group, which had its genesis in Fletcher Challenge. Bankers Trust brought Westfield here, installing the Australian business as the managers at the time.

Paul Keane, a retail property expert of the Parnell-based consultants RCG, is wondering about the group's longer term intentions in New Zealand.

"The announcement that Scentre Group has entered into deals to sell three of its shopping centres comes at a time when retail growth in terms of bricks and mortar is at the highest level since the 1970s.

" It is no surprise they have sold three centres. They were not strategic to the group, and they have been on the table for sale for some time," he said.

Sold

• Johnsonville

• Downtown, Auckland CBD

• Pakuranga Plaza

• Glenfield

• Chartwell Hamilton

• Queensgate, Lower Hutt