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News release


Coles enters into property joint venture with ISPT

ISPT acquires a 75 per cent interest in an initial portfolio of 19 Coles-owned shopping centres valued at approximately $532 million and will look to place further assets into the joint venture

AUSTRALIA, 1 MAY 2013 – Acting on behalf of Coles, Simon Rooney of Jones Lang LaSalle has exclusively negotiated the sale of a 75 per cent interest in an initial portfolio of 19 Coles-owned shopping centres across Australia to ISPT. The initial portfolio is valued at approximately $532 million, and the transaction will deliver proceeds to Wesfarmers of approximately $400 million.
The Portfolio includes 18 neighbourhood shopping centres and one sub-regional shopping centre, spread across New South Wales, Queensland, Victoria, South Australia and the Australian Capital Territory.
Under the arrangement, Coles will retain 25 per cent ownership in the centres and will continue to manage the Centres. ISPT and Coles will also look to place further properties into the joint venture as opportunities arise and Coles will maintain development control over these properties.
Australian Head of Retail Investments, Simon Rooney said, “Retail expenditure in the grocery and supermarket category has grown at 5.6% per annum over the past 10 years, outperforming total retail spending of 4.8% per annum over the same period.
“These solid fundamentals have underpinned the resilient performance of neighbourhood shopping centres, resulting in increased levels of demand for exposure to these non-discretionary expenditure based centres, by institutional investors in recent years. 
“Achieving scale within the neighbourhood sector has been an issue in the past, so this portfolio presented an opportunity to gain immediate access to a high quality portfolio with close to 60 per cent of the income secured to Coles, together with a rolling development pipeline,” said Mr Rooney.
This latest joint venture transaction between Coles and ISPT is further evidence of a growing trend of capital partnering to unlock funds for future development – one of the most prominent themes in the retail investment market at present. It follows $3.4 billion worth of part share transactions of retail assets in Australia during 2012 – representing more than half of total transactions in 2012, $1.1 billion in 2013 (>$200 million, year-to-date) and Jones Lang LaSalle a further $1 billion of part shares in due diligence due to exchange in coming weeks.
Mr Rooney said, “This is yet another example of how these joint venture structures can offer significant synergies to both parties.”