Retail partners Vicinity Ltd and GIC Real Estate Pte Ltd have recently transacted one of the more unusual and rare commercial sales – an asset swap involving some of Sydney’s best loved shopping centres.

In the swap a 50% share in the 99-year leasehold of the Queen Victoria Building, the Strand Arcade and The Galeries Victoria was transferred to Vicinity Ltd, which then transferred a 49% share in their Chatswood shopping centre, Chatswood Chase, to GIC’s Ipoh Property Pty Ltd. The sale price for the city stores comprised the half shares in the shopping centres, which were considered to have a value of $556 million plus a cash adjustment with Chatswood Chase’s value deemed to be $562.3 million.

The Queen Victoria Building and Strand Arcade are both as much tourist attractions as shopping centres. According to Cityscope, the heritage QVB, built in the late 1890s and restored at a $75 million cost 100 years later is now a five-level retail arcade of 197 shops plus a seven-level underground car park for 720 vehicles. The picturesque Strand Arcade was also built in the 1890s and comprises two five-storey buildings to George and Pitt Streets connected by a 3-storey section in the middle. The third centre in the swap deal, Galeries Victoria is a four-level retail podium providing 15,000 sqm of retail space over 70 shops.

Vicinity’s Chatswood Chase is a sprawling 62,000 sqm centre with over 200 shops and parking for 2,440 cars. It has been variously refurbished over the years to the tune of $290 million.

Both partners are set to benefit by diversifying their portfolios over a different catchment, market and asset class.