GPT will be looking for offers of around $500 million as it seeks to offload Wollongong Central to a new owner in the coming months.
The company’s regional general manager Antony Keenan said the surprise sale – which includes all property ownership and the rights to manage the entire centre – was finalised by on Tuesday.
“Retailers have just been informed this morning,” he said, as the sale was announced on Wednesday.
Mr Keenan acknowledged there may be a public perception that GPT pulling out of Wollongong was a sign of economic strain in the city, but said the decision to sell had been made for the opposite reasons.
“We have just completed a successful redevelopment of the Gateway Building – and also H&M the year before - to develop a world class David Jones, Mecca Maxima and all those other great retailers,” he said.
“And the market is very strong at the moment for interest in being able to acquire 100 per cent ownership of these type of shopping centres – so it’s the right time to list the centre for sale.”
“We certainly have faith in the Wollongong market – the centre has seen some really strong growth and the whole CBD is being rejuvenated.”
Announcing its intention to seek interest from domestic and overseas buyers for the Wollongong sale, the company also said its portfolio was moving towards “super-regional” shopping centres – like Macarthur Square and Melbourne’s Highpoint centre.
Wollongong is considered to be a “super-prime CBD shopping centre”, so does not fit with this strategy.
Nevertheless, Mr Keenan said he expected strong interest in the sale as the last time 100 per cent of a regional shopping centre was listed for sale in Australia was in 2014.
“These type of shopping centres really don’t come up internationally very often,” he said.
In the past few years, GPT has shelled out more than $300 million to revitalise the centre.
In now comprises a David Jones, Target, Coles, 14 “mini-majors” and 170 specialty stores with a retail floor space of 54,600 square metres.
Expressions of interest for the sale will open on March 5 and close in mid-April.
Mr Keenan said there would then be a protracted due diligence process by any potential buyers, with the possible sale not likely to take place until mid-year if all goes to plan.
“It’s going to be business as usual for retailers and customers, who won’t see anything different during this time,” he said.
“If the sale does go ahead, for the retailers, they’ll simply carry over to the new owner – and anything that is currently in the works will carry on. It will just be a new name on the lease.”
City investor bailing out after 20 years
GPT has owned shopping centre space in Wollongong’s CBD for more than 20 years.
In 1996 it began sprucing up the old Crown Central food court, before buying the the Gateway shopping centre from the council in 1998, for $32.75 million.
By 2000, GPT has removed the '80s pink structure fronting Wollongong mall to make way for the bridge link between Crown Central and Gateway, and the centre was renamed Wollongong Central.
There have been dramatic changes since then, with GPT’s investment of more than $300 million in recent years heralded as one of the main catalysts for Wollongong’s revitalisation.
The first whispers of GPT’s plan to overhaul the tired CBD began in 2002, but – thanks to legal battles, the global financial crisis and the council’s sex for development scandal – it took until December 2011 for construction work on the huge West Keira project to begin.
In October 2014, the new shopping centre opened to much fanfare, and three year’s later, in October just gone, GPT completed its transformation by opening the new David Jones store, food hall and a dozen new drawcard stores.
Despite one of the city’s biggest investors now bailing out, Wollongong Lord Mayor Gordon Bradbery said he did not think GPT’s potential sale of Wollongong Central would have a negative effect.
Instead, it was “an opportunity for another business to continue the growth”.
Cr Bradbery said he was confident the mix of shops and services, as well as recent renovations meant the centre had “a lot of potential” for investors wanting to capitalise of Wollongong’s growing number of inner city residents and office workers.
It could also signal a new direction for the CBD, he said, noting there was a previous approval to build high-rise apartments on top of the West Keira complex.