Scentre Group shares have jumped after the property player announced a share buyback on the back of the $1.52 billion sale of three Sydney CBD office towers to private equity firm Blackstone.
The ASX-listed property player on Thursday said the sale would be followed by an $800 million buyback after the company reports its first-half results on August 22.
Scentre said in a release to the ASX it had granted a 299-year leasehold interest for three office components in Market Street and Castlereagh Street over to private equity firm Blackstone.
Scentre will retain ownership of Westfield Sydney and Sydney Tower.
Group chief executive Peter Allen said the $1.52 billion transaction price represented almost $800 million in additional value on investment and an unlevered internal rate of return of over 16 per cent per annum.
“Our development of the Sydney Office Towers in 2011 and ongoing investment until now has created significant value for securityholders,” Mr Allen said.
Scentre shares lifted 2.56 per cent to a more than two-month high of $4.01 by 1405 AEST.
The company has now released $2.1 billion in capital following the sale of 50 per cent of its stake in Westfield Burwood for $575 million last month.
Mr Allen said the company would initially use the new funds to repay debt before commencing an $800 million share buyback in August.
Scentre said its forecast dividend for 2019 remained unchanged at 22.60 cents per security.