QIC signs US malls deal

THE Queensland Government’s investment corporation has struck one of the biggest shopping centre deals in the US this year.

QIC’s global real estate unit is to buy joint venture partner Forest City Enterprises out of 10 US regional shopping centres.

The portfolio is valued at about $ US3.18 billion ($ 4.05 billion). Alongside the malls, QIC will also take on Forest City’s retail operating platform.

QIC said it was acting on behalf of a client, who it has not named.

It separately has a mandate with Australian Super, which in 2015 secured a 25 per cent share of the Ala Moana Centre in Hawaii in a $ 1.1 billion deal.

Australian Super also has a stake in a shopping centre at Milton Keynes, northwest of London. QIC global real estate managing director Steve Leigh said the deal was a “milestone”.

“We are building off more than a decade of amassing market intelligence and understanding in the US retail sector,” he said.

“We view the US real estate market and the retail sector in particular as a strong investment opportunity.

“We are encouraged by the broader economic conditions in the US and the resilience of the consumer as demonstrated by continuing strength in the underlying fundamentals the portfolio.”

In a nod to a shift whereby landlords are moving to accommodate online retailers in their centres, and even to include apartments on their sites, Mr Leigh said the group had “the capability and the capital” to develop the assets into “multifaceted destinations”.

The deal will be completed in two stages with the transfer of interests in the first six malls expected to be completed by for the end of the year, subject to third- party approvals.

Assets in the first stage include The Shops at Northfield Stapleton in Denver, Colorado, and Westchester’s Ridge Hill in Yonkers, New York.

The Australian fund manager has an option over four more centres in the second stage, including the Short Pump Town Center in Richmond, Virginia. QIC’s move is in keeping with its top- level position in running shopping centres in Australia. “We have an incredibly strong Australian business, which has demonstrated through its 25- yearplus track record that we know how to acquire and invest in real estate assets that remain an integral part of their community,” QIC CEO Damien Frawley said.

“We look forward to applying this approach in a large and attractive market with real estate fundamentals that are similar to those in Australia.”