Australian supermarket chain Coles has forged a joint venture with Australian property fund manager ISPT to offload 75% stake in 19 shopping centres for $532m.

The sale of initial portfolio will provide Coles’ parent company Wesfarmers total amount of $400m.

The portfolio includes 18 shopping centres and one sub-regional shopping centre, located across New South Wales, Queensland, Victoria, South Australia and the Australian Capital Territory.

Under the terms of agreement, Coles will hold 25% interest in the centres and continues to manage them.

Coles finance director Rob Scott claimed that the joint venture would result into mutual benefits for both the companies involved.

"This joint venture with ISPT means Coles has secured a long-term property partner with closely aligned commercial interests," Scott added.

"By retaining property development and management rights, Coles can ensure that it has flexibility and control over both store format
layouts and the in-store experience for our customers.

"The arrangement also affords Coles the opportunity to secure funding for our future store growth plans," Scott concluded.

The company is keen on placing additional properties into the joint venture with Coles retaining the development rights of
the properties.

Wesfarmers finance director Terry Bowen remarked that the joint venture is part of Wesfarmers’ strategy to release capital from its balance sheet and with this sale it has released nearly $400m of capital.

"This joint venture with ISPT progresses Wesfarmers’ plans to recycle capital in business divisions that have experienced strong growth in freehold property. Wesfarmers will continue to look for innovative structures and partnerships such as this to create value for our shareholders," Bowen said.

ISPT currently manages more than $8bn of funds under management with assets including Forrest Chase, Perth City Central, and the 100 St Georges Terrace building.