This article is from the Australian Property Journal archive
ADELAIDE’S only purpose-built outlet shopping centre has hit the market for the first time, in Lewis Land Group’s Harbour Town Premium Outlets.
Located on a 97,500sqm landholding on the western boundary of Adelaide Airport, the open-air centre comprises 118 outlet stores.
Simon Rooney from CBRE has been appointed to manage the sale of the centre on behalf of vendors, Lewis Land Group.
“Harbour Town Adelaide is one of just 17 outlet centres across the country, with only 11 major, comparable transactions having occurred in the past decade,” said Rooney, Pacific head of retail capital markets at CBRE.
“The sale provides an opportunity for investors to gain immediate scale in the highly sought after but rarely traded outlet shopping sub-sector, which benefits from greater trading resilience during downturns and continues to demonstrate outperformance given its discount-based offering.”
The 28,544sqm centre includes major tenants such as Polo Ralph Lauren, Coach and Calvin Klein, as well as Australia’s largest Nike Unite and Tommy Hilfiger outlets.
With the asset having recently undergone a $12 million upgrade and also benefitting from easily accessible parking for 1,480 vehicles.
“Harbour Town represents a rare opportunity to buy into a high-performing outlet retail centre with exciting future growth prospects,” added Rooney.
“The attractive tenant profile is underpinned by strong trading specialty tenants, reporting outstanding specialty productivity of $10,014/sqm on highly sustainable rents, providing a platform for attractive rental growth.”
Lewis Land Group, who developed Harbour Town Premium Outlets in 2003, is moving to sell the property after significant appreciation in the value of the group’s retail assets and looking to rebalance its portfolio.
While capitalisation rates have jumped by more than 200 basis points over the last year, the number or retail property sector transactions has plummeted by 41.2% annually, as the gap between bids and offers grows for shopping centres.
Last week MSCI head of Pacific real assets research, Benjamin Martin-Henry said price discovery has become more and more challenging for both buyers and sellers, which resulting in restraint in the market
“Outlet centres serve a much broader trade area than traditional retail centres and, in the case of Harbour Town Adelaide, the existing trade area population of 1.3 million residents as at June 2022, is forecast to grow by 1.1% per annum to reach 1.4 million residents by 2032. Over the same period, retail expenditure in the area is forecast to grow from $19.4 billion to $28.2 billion, representing annual growth of 3.8%,” said Rooney.
“There continues to be considerable interest in Adelaide’s retail investment sector from both domestic and offshore investors, who have acquired circa $990 million of retail assets in recent years. This interest has been underpinned by Adelaide’s retail yield spread relative to Sydney and Melbourne and South Australia’s stamp duty exemption on commercial transactions.”
