QIC has sold a half-stake in Melbourne’s Watergardens shopping centre to the Commonwealth Superannuation Corporation for $480 million. The price is against a $470 million book value.
The 47.9 hectare holding at Taylors Lakes has significant development upside, including apartments, and is located near Watergardens train station and the Sydenham station. Notably, Taylors Lakes is about 20 kilometres north-west of Melbourne’s CBD, making it an attractive location for residents and commuters alike. The complex itself was developed by QIC in 1995, at 399 Melton Highway, and has since become a major retail hub in the area.
The GPT Group will act as CSC’s investment manager, part of a $2.6 billion mandate. QIC will hold the balance and continue to manage the complex, which includes 206 retail tenancies across 71,226 square metres. The complex also features an 86-room hotel leased to Quest, as well as the Watergardens Super Centre, providing a diverse range of amenities for visitors.
Major anchors include Aldi, Big W, Hoyts, Kmart, and Woolworths, with several mini-majors, kiosks, and pad sites also on site. QIC reported 11.7 million annual visits to the centre. This high foot traffic is likely due to the centre’s strategic location and the variety of retail options available, including the nearby Watergardens Homeplace, which was sold to Harvey Norman for $97m five years ago.
The sale is part of QIC’s broader development plans for the precinct, which includes staged development with apartments and offices. The QIC Town Centre Fund and QIC Property Fund previously held the centre in a 50:50 split. As part of these plans, QIC has invested more than $110m in capital works and remixing since 2019, including the Town Square and South Mall precincts, to enhance the centre’s amenities and appeal.
CSC’s property portfolio, managed by GPT, now includes another retail asset, with the pair having a $2.6 billion mandate covering various properties, including Melbourne’s 101 Collins Street and the Indooroopilly Shopping Centre. The Watergardens deal adds to this portfolio, which is managed through the ARIA Investments Trust and utilizes external managers to optimize returns. The CSC and GPT partnership’s mandate is approaching $3b, solidifying their position as major players in the Australian property market.
