MECCA makes up its mind, Newmark joins listed arena

AMIDST Newmark Property REIT’s (NPR) successful ASX debut, with a $128.3 million IPO, Newmark has secured MECCA Brands as the flagship tenant at the former David Jones menswear building on the Bourke Street Mall.

The REIT’s successful listing on the ASX, with portfolio of more than $449 million, following the stapling of the unlisted Newmark Hardware Trust and the Newmark Capital (Chadstone) Property Trust, will see a continuation of the expansion of its large format retail holdings.

“Since establishing Newmark 10 years ago, we have maintained a very strong focus on real estate fundamentals and growing a strategic portfolio and we are very proud of the portfolio we have today and humbled by the support of many along the journey,” said Simon Morris, joint managing director at Newmark Capital.

The REIT currently owns eight large format retail assets, predominately leased by Bunnings. Having acquired more than $200 million in Bunning’s properties over the last 12 months alone, the hardware giant accounts for circa 75% of the REIT’s revenue.

“Newmark Hardware Trust has established a strong foundation for growth since its launch in 2014. These additional funds and the stapling with the Chadstone Trust will help facilitate expansion plans and capitalise on this growing market,” said Chris Langford, joint managing director at Newmark Capital.

Since their inception the Hardware Trust has averaged a total return of 16% per annum, with the Chadstone Trust has achieving an average 11% per annum in total returns.

“The Newmark Property REIT really resonated with retail investors. You have security of tenure, security of income and an attractive yield compared to other investments. A cash yield of 5.3 per cent from some of the best tenants in Australia,” said Tim Church, managing director and chairman of investment banking at Morgan Stanley.

Meanwhile, Australia’s leading beauty retailer, MECCA, has signed a lease for the ground and first floors of Newmark’s 299 Bourke Street on Melbourne’s Bourke Street Mall.

“After 24 years of opening stores across Australia and New Zealand, our flagships are the culmination of the past, present and future of MECCA as a business,” said Jo Horgan, founder and co-CEO of MECCA.

Spanning 3,000sqm over two floors, the site is due in 2023 to become the brand’s largest store and the Southern Hemisphere’s most expansive dedicated beauty retail destination.

“Since launching our first flagship store in Sydney in November 2020, we have been listening to our customers and researching what they would want from our next flagship, so we are dreaming big and concepting a truly customer-centric and all-encompassing store,” added Horgan.

This new store will surpass MECCA’s current flagship offering on Sydney’s George Street by more than 1,000sqm and will offer customers customizable services, brand immersion, masterclasses and pop-ups.

MECCA which was founded in Melbourne in 1997 now has 107 locations across Australia and New Zealand, having launched its first store in the Northern Territory just last week.

Newmark purchased the iconic Bourke Street site in a $121 million deal in the middle of Melbourne’s extended lockdown in July of 2020, from David Jones’ parent company, Woolworths Holdings.

The group announced its plans to transform the building earlier this year, bringing both retail and office offerings to address,  with Bates Smart appointed to design the redevelopment.

“Newmark is delighted to welcome MECCA’s flagship store to 299 Bourke Street. MECCA are a clear market leader with an outstanding and compelling retail offer, and their arrival at 299 Bourke Street will be a significant boost for Melbourne’s CBD, and marks a great beginning for the rebirth of this iconic building – this brand, along with other great retailers and our new age office spaces will help draw people back to the city,” concluded Langford.