Scentre Group Sells 25% of Westfield Chermside at 5.00% Cap Rate for $683M
Scentre Group has sold a 25% stake in Westfield Chermside to a Dexus-managed fund for $683 million, maintaining half ownership and management control. This move injects fresh capital aligned with its long-term strategy.
- 25% interest in Westfield Chermside sold for $683 million
- Transaction values asset at 5.00% capitalisation rate
- Scentre Group retains 50% ownership and management role
- Scentre invests $50 million as foundation investor in Dexus fund
- Approximately $1.3 billion new capital introduced into the Group
Strategic Partnership Strengthens Capital Base
Scentre Group has announced a significant capital partnership involving its flagship retail asset, Westfield Chermside in Brisbane. The company has agreed to sell a 25% interest in the centre to a new Dexus-managed fund for $683 million, a price that matches its book value as of June 30, 2025. This transaction follows a similar deal earlier in the year, which introduced the Dexus Wholesale Shopping Centre Fund as a 25% joint venture partner.
Maintaining Control While Unlocking Value
Despite the sale, Scentre Group will retain a 50% direct ownership stake and continue to manage the property, leasing, and development activities. This approach allows the group to unlock capital while maintaining operational control over one of its key retail destinations. The transaction values Westfield Chermside at a capitalisation rate of 5.00%, reflecting investor confidence in the asset's income-generating potential.
Capital Management and Growth Prospects
As part of the arrangement, Scentre Group will invest $50 million as a foundation investor in the new Dexus-managed fund, though this investment is expected to be temporary. CEO Elliott Rusanow highlighted that these transactions collectively introduce approximately $1.3 billion of new capital into the group. This influx aligns with Scentre Group’s long-term capital management strategy, providing additional resources to pursue strategic objectives and sustainable growth for securityholders.
Looking Ahead
Settlement of the transaction is anticipated before the end of the year, marking a timely conclusion to a year of strategic capital partnerships. The move underscores the evolving landscape of retail property ownership, where joint ventures and fund partnerships are increasingly leveraged to balance capital efficiency with asset control.
Bottom Line?
Scentre Group’s capital partnership with Dexus signals a savvy balance of growth and control in retail property management.
Questions in the middle?
- What are the long-term plans for Scentre Group’s temporary $50 million investment in the Dexus fund?
- How will this capital injection influence Scentre Group’s development pipeline and acquisitions?
- Could this joint venture model be replicated across other Westfield centres to unlock further capital?
