Vicinity portfolio lost $37m in value in six months

Vicinity Centres’ retail portfolio lost $37 million in value over the six months to 31 December 2018, following an independent valuation of 38 of its 62 properties and an internal review of the rest.

The total valuation across the group’s 62 centres fell to $15.83 billion over the period, a 0.2 per cent decline.

Net valuation declines were seen across regional (2.6 per cent), sub-regional (1.6 per cent) and neighbourhood centres (5.7 per cent), while the group’s “flagship portfolio”, which includes such assets as Chadstone shopping centre, various CBD assets and DFO centres, saw a valuation increase.

“The flagship portfolio increased in value by $169 million or 2.4 per cent in the period, with capitalisation rates firming by 4 basis points reflecting continued income growth and strong investor demand for these assets,” Vicinity Centre’s chief executive and managing director Grant Kelley said.

“Chadstone recorded a gain of $42.4 million or 1.4 per cent, valuing Vicinity’s investment in the asset at $3.15 billion, with a capitalisation rate of 3.75 per cent.”

Additionally, the group’s DFO assets saw valuation gains over the period, driven by strong income growth, with DFO South Wharf up $48.4 million (a 7.4 per cent gain) and DFO Homebush up $34.3 million (a 7.1 per cent gain).

Vicinity’s DFO Perth, launched in October 2018, saw a 40.4 per cent increase on its value equal to $30.7 million following strong sales over its launch period.

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