The Vicinity Centres (ASX: VCX) share price is edging lower on Tuesday afternoon. This comes after the leading retail property group provided an update in regards to bolstering its asset portfolio.
At the time of writing, Vicinity shares are down 0.18% to $1.68.
What did Vicinity announce?
In its release, Vicinity advised it has reached a conditional agreement with Australian Prime Property Fund Retail (a wholesale fund managed by Lendlease).
The deal will see Vicinity acquire a 50% interest in Harbour Town Premium Outlets Gold Coast, Queensland for $358 million.
The remaining stake in the asset will continue to be held by Australia's oldest private property developer, Lewis Land Group. Vicinity will undertake all leasing activity, while Lewis Land Group will manage the property.
However, the news has not excited investors. The Vicinity share price edged into the green in morning trade before slipping back.
It's worth noting the acquisition is conditional upon Lewis Land Group waiving their pre-emptive right. The property developer can purchase the asset as co-owner of Harbour Town.
However, should Vicinity be able to acquire the centre, the investment would yield an additional revenue stream. Harbour Town comprises a Woolworths supermarket, Reading cinemas, 17 mini-majors, 189 specialty stores, 7 kiosks, and 8 offices.
Vicinity plans to tap into its existing debt facilities to fund the purchase. Settlement is expected to occur on 30 November 2021.
Vicinity CEO and managing director Grant Kelley commented:
Today's announcement reflects our strategy to invest in premium retail assets where we can buy well and add value. Harbour Town is located in an attractive trade area and the centre's annual MAT [moving annual total] is more than double the average MAT for Vicinity's current outlet portfolio and is expected to grow at more than 3% per annum to 2031.
We will continue to optimise our asset portfolio by actively considering acquisition opportunities where we can add value as well as divestment opportunities that make strong strategic and economic sense for Vicinity and its securityholders.
About the Vicinity share price
Over the past 12 months, the Vicinity share price has gained almost 20% and is up about 5% year to date.
Based on today's price, Vicinity presides a market capitalisation of roughly $7.65 billion and has approximately 4.5 billion shares outstanding.
