This article is from the Australian Property Journal archive
A HALF-share in, the Colonnades in Adelaide, Australia’s fourth largest shopping centre land holding, is up for grabs as the retail sector runs with the momentum generated by a suite of major sales at the end of 2021.
The regional shopping centre has 88,554 sqm of floor space and is anchored by Coles, Woolworths, Aldi, Kmart, Big W and Dan Murphy’s, and supports 12,700 sqm of non-retail uses occupying over 42% of the total gross lettable area.
It sits on 35.8 hectares of land – the fourth largest shopping centre land holding in the country – about 26 kilometres south of the Adelaide CBD and adjoins the Noarlunga train station, hospital and SA TAFE.
Perron Group is offering the stake after a decade of ownership. Co-owner Vicinity Centres has its share on its books at $113.2 million.
JLL’s Nick Willis and Sam Hatcher have been appointed to sell the stake via an expressions of interest campaign.
Willis said the centre is anchored by a strong performing convenience-based tenant mix that is further underpinned by a significant landholding adjoining major infrastructure.
“These elements provide the foundations for ample future value-add and development opportunities.”
In addition to the longer-term development potential there is immediate leasing value-add through the repositioning of a former Masters store.
Myer vacated the centre in 2017 and the space has since been repositioned and filled by retail and non-retail tenants. Retail sales in the asset have grown almost 5% year-on-year since.
JLL recorded $2.3 billion worth of part share capital partnerships in 2021 across eight transactions, in addition to the UniSuper and Cbus Property taking major stakes in the Pacific Fair and Macquarie Centre centres for $2.2 billion in the largest retail transaction in Australian history.
“We continue to see a significant pipeline of opportunities for capital partners to participate in the retail recovery and repositioning of shopping centres to extract additional value, with the experience of leading managers and specialists in the sector,” Willis said.
“The uplift in demand from passive capital into retail assets has been very significant by historical standards ($4.5 billion in 2021) and is a solid endorsement of the outlook for the sector.”
Other major part share transactions included Hong Kong’s Link REIT taking a 50% interest in trophy Sydney retail assets the Queen Victoria Building, The Strand Arcade and The Galeries for a combined $538.2 million and Vicinity Centres acquiring a 50% interest in Harbour Town Outlets Gold Coast from Lendlease’s Australian Prime Property Fund Retail for $358 million.
In Adelaide, Fortius partnered with ASX-listed Irongate for the $210 million acquisition of Rundle Place in the CBD.
Perron Group sold a 50% share in the Gold Coast sub-regional shopping centre Runaway Bay in October.
Perron Group was founded by Stan Perron, built a $4 billion fortune of property, iron ore, car distribution and other assets. He died four years ago aged 96, and Perron Group has since been tweaking its portfolio.
The offering comes as the retail sector witnesses a resurgence. Real Capital Analytics recorded $17.2 billion worth of retail deals in 2021, a 138% increase on the subdued 2020.
Expressions of interest for the Colonnades Shopping Centre close 10th March.
