Chadstone shopping centre announces $600m redevelopment
Melbourne’s Chadstone shopping centre, co-owned by billionaire John Gandel and the listed Vicinity Centres, is set for a makeover with its owners submitting plans for development worth more than $600 million.
Co-owner of the largest mall in Australia, Vicinity Centres, has announced the next phase of the precinct based lodging plans to the local council to increase parking, commercial office space, retail and dining.
The company revealed plans for a makeover at its annual general meeting in November.
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Totalling $685 million, 1400 additional car spaces, a new nine-story commercial office building, expansion of the dining precinct and expansion of retail space has been submitted through development applications to the City of Stonnington in Melbourne’s east.
Vicinity chief development officer Carolyn Viney says the development will help bolster the “growing Monash economic region” in a state expected to increase its population by 1 million by 2026.
“We’re excited to be able to share with our neighbours and the broader community our vision and proposed plans for the future of Chadstone,” she says.
“Our plans will address demand from commercial tenants wanting to be based at Chadstone and continue to deliver the experiences our customers and retailers have come to expect from The Fashion Capital.”
Development applications are currently awaiting approval by the council with works scheduled for 2021 and expected to take four years.
The Melbourne complex generates $2 billion in annual sales, ranking Chadstone as the No.4 shopping centre in the world, by sales, with 24 million people visiting each year.
In November, the $130 million five-star Hotel Chadstone opened, with the building operated under the MGallery by Sofitel brand.
In Sydney, Vicinity Centres and GIC have a $1bn plan to overhaul their jointly owned Chatswood Chase shopping centre, while in Brisbane Vicinity Centres has also been divesting non core assets. In November, it sold its 25 per cent stake in the Mt Ommaney Centre, 14km south west of the Brisbane CBD, for $94.5 million at a 3.3 per cent premium to book value.
Further south, Vicinity Centres divested the Corio Central centre, 60km from Melbourne at a 3.8% discount to book value with the centre picked up by IP Generation Pty Ltd.
The transactions were expected to reduce gearing by around 90 basis points to 26.2% with the sale proceeds to be used to repay debt in the short term.
Vicinity Centres chief executive and managing director Grant Kelley said there was improved investor demand and the group was focusing its portfolio on investing in market leading destinations.
Vicinity Centres has sold 37 non core assets for $3.3 billion at a combined 0.7% premium to book value.
Kelley says funds from the sale will be used to invest in strongly performing centres as well as acquiring destination assets.