Scentre Group Brings Australian Retirement Trust Into Westfield Sydney JV

Strategic Partnership Formation

Scentre Group (ASX – SCG) has announced a significant joint venture deal with Australian Retirement Trust (ART), which will acquire a 19.9% interest in the iconic Westfield Sydney retail precinct for $864 million. This transaction, priced at Scentre’s book value as of June 30, 2025, reflects a capitalization rate of 4.69%, underscoring the asset’s strong valuation in a competitive retail property market.

Despite the sale, Scentre Group maintains majority ownership with an 80.1% stake and continues as the property, leasing, and development manager, ensuring operational control remains firmly in its hands. The move aligns with Scentre’s ongoing strategy to introduce third-party capital into its portfolio, enhancing liquidity and enabling further growth initiatives.

Capital Recycling and Value Realisation

This deal follows a similar joint venture earlier in 2025, where Scentre partnered with Dexus funds to sell a 50% interest in Westfield Chermside in Brisbane for $1.3 billion. Together, these transactions have brought approximately $2.2 billion of new third-party capital into Scentre’s assets this year, a clear indication of the company’s commitment to capital recycling as a core part of its long-term plan.

Since acquiring and developing Westfield Sydney starting in 2001, Scentre Group has invested $3.3 billion into the precinct, which includes 97,500 square meters of retail space and 74,000 square meters of office space. The sale of the office towers in 2019 for $1.5 billion, combined with this latest joint venture, means Scentre has realised around $2.4 billion from Westfield Sydney to date.

Strong Asset Performance and Market Position

Westfield Sydney remains a premier retail destination, attracting over 33 million visitors annually and generating business partner sales exceeding $1.1 billion in 2024. The precinct’s prime location in Sydney’s CBD and its mix of local and international retailers continue to underpin its strong performance and appeal to institutional investors like ART.

With a net investment now reduced to $0.9 billion, Scentre’s remaining interest in Westfield Sydney is valued at $3.5 billion; nearly four times the original capital invested. This impressive value uplift highlights the success of Scentre’s development and management strategy over more than two decades.

Looking Ahead

Settlement of the transaction is expected in early February 2026, marking another milestone in Scentre’s capital management journey. The company’s ability to attract reputable partners and unlock value from its flagship assets will be closely watched by investors as it navigates a dynamic retail property landscape.