Vicinity to sell $1bn of assets to enhance portfolio

Listed property developer Vicinity Centres (ASX: VCX) will sell off $1 billion of its assets to reinvest the money in more value-accretive opportunities.

The group will sell off sub regional and neighbourhood centres to focus on new investments which it calls "destinations" and "entertainment experiences".

Grant Kelly, CEO and managing director of Vicinity, says the decision to sell the regional properties came after an "extensive" review of the company's portfolio.

"It is clear we need to focus our resources on creating destinations that provide market-leading shopping, dining and entertainment experiences," says Kelly.

"We are divesting up to $1.0 billion of non-core assets to fund the acceleration of our strategy."

Specifically, the company will reinvest the funds into city based properties like The Glen and Box Hill Central in Melbourne, Galleria in Perth, and Chatswood Chase and Bankstown Central in Sydney.

"These investments will continue Vicinity's strong track record of value creating since the merger and driver further net tangible asset growth," says Kelly.

This decision to further focus on city based "destination" centres follows the company's recent acquisition of the iconic Queen Victoria Building.

The company also recently acquired Australia's leading outlet centre portfolio - the DFOs.

Vicinity says the $1 billion injection of cash will not impact full year 2018 financial guidance, due to the expected timing of the sales.

Shares in Vicinity will open on Monday at $2.67 per share.

David Simmons - Business News Australia - 4 June 2018