Stockland sells off two Brisbane shopping centres

The Stockland Cleveland shopping centre. Picture: Stockland.

Diversified property group Stockland has offloaded two Queensland shopping centres for $143 million as it pushes ahead with plans to sell off about $400 million worth of retail assets.

A major centre in the Brisbane suburb of Cleveland was sold to syndicator Haben and the smaller inner-city complex in Toowong, which was slated for three apartment towers, has been bought by interests associated with the private State Development Corporation.

A series of residential developers have been selling their apartment sites as their projects no longer stack up in the tougher climate for unit pre-sales.

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Office developers have bought at least six major sites that were slated for mixed use towers in Melbourne and are eyeing more sites in Brisbane and Sydney.

Retail properties have also been under pressure as they lose value due to shoppers switching away from traditional centres.

Stockland has already sold malls in regional locations and has put other assets across NSW, Queensland and Victoria on the block.

In its latest disposal, Stockland said the combined worth of the sales were at a slight premium to book value, but there was a discount on the Cleveland centre that sold to Haben for $103 million, at about 13% below its valuation of December 2017.

But State Development has paid up for a site in the Brisbane suburb of Toowong, securing it for about $40 million.

Stockland had approval for 533 apartments across three towers of up to 25 storeys but dumped these plans as the city’s unit market has soured. The buyer, potentially with the backing of long-time partner White & Partners, could pursue a high-rise retirement project, but declined to comment yesterday.

An artist’s impression of the apartment towers that had been proposed at Stockland Toowong.

Stockland chief executive Mark Steinert says the transactions took the group’s asset sales for the financial year to $256.1 million or about 64% of its target.

Two years ago he declared Brisbane’s inner-city apartment market was oversupplied and Stockland would hold off on constructing a major mixed-use development.

The company yesterday insisted it was backing its apartments business even as off-the-plan sales fall away across the industry.

Andrew Whitson, chief executive of Stockland’s Communities division, said the company remained “committed to building a sustainable apartments business” in keeping with the group’s focus on the urbanisation of major cities.

Whitson says the group is taking a “disciplined approach” to its unit strategy and continually assessed each project depending on current and forecast local market conditions.

“We have made the decision to sell our Toowong site to recycle the capital back into our workplace and logistics development pipeline, and invest in other counter cyclical growth opportunities,” he says.

Whitson says Stockland holds other apartment and mixed use development sites in Sydney, including Rosebery, Parramatta and a retirement apartments site in Epping.

“We will assess the commencement of these projects in the future, dependent on market conditions,” he says.

JLL’s Sam Hatcher and Jacob Swan brokered the sale of Stockland Cleveland.

This article originally appeared on www.theaustralian.com.au/property.