Woolworths to sell off shopping centres, lease back

Posted by Nicole Eckersley on 7th September 2010

Woolworths Limited yesterday announced plans to sell off a portfolio of over 30 of its shopping centres on a long-term leaseback basis. The portfolio, valued at over $900 million, will be placed up for tender.

Woolworths said that, in order to facilitate expansion during the Global Financial Crisis, the company has increased its involvement in site development using its own balance sheet, leading to the ownership of a large portfolio of completed retail centres – assets it now wishes to divest itself of, as a self-described ‘generally not a long term holder of property assets.’

“We are continually reviewing opportunities for the disposal of property assets and amid improving market conditions in the retail sector, we now see an opportunity to place a portfolio of quality completed retail sites for tender, on the basis of sale and long term leaseback transaction. However, there is no urgency to dispose of the portfolio and we will happily continue to hold the properties on balance sheet should market conditions dictate this course of action,” said Woolworths Director of Property Ralph Kemmler.

Most of the sites, which include Ashgrove Marketplace in Queensland, Carnes Hill Marketplace in New South Wales and Pakington Strand in Geelong West, Victoria, are anchored by a Woolworths supermarket.

The larger Marketplace centres usually also include other stores within the Woolworths Group, such as BIG W and Dan Murphy’s, as well as other specialty shops.