Colonial shops till it drops

COLONIAL First State Retail Trust has spent $498 million to buy four DFO centres in Victoria and New South Wales from Austexx.

The portfolio includes DFO Homebush (NSW) – $135.5 million; DFO Essendon & Homemaker Hub (VIC) – $125 million; DFO Moorabbin (VIC) – $84.5 million; and a 50% in stake in DFO South Wharf & Homemaker Hub (VIC) – $153 million.

All together, the centres have a total gross lettable area of 151,081 sqm.

The deal was negotiated by JLL’s head of retail investments Simon Rooney who said local institutional appetite for major retail properties which was simply non-existent in 2008 and up until late-2009, has returned.

“At the peak of the market pre-2008, there were simply not that many opportunities to make major retail investments, and those that did come up were extraordinarily competitive due to looser credit conditions creating many more potential buyers.

“Local REITs have largely re-emerged as buyers due to extensive capital raising over the past two years, while many superannuation funds are also in a position to buy again because their portfolios have rebalanced and they are no longer over-weight in property,” he added.

“The investment tide is clearly turning following the recent sales of ING’s Lakeside Joondalup at $475m, the 50% DEXUS interest in Westfield Whitford City for $256.5m and now a $498m outlay by CFX for DFO.

“This new opportunistic wave of institutional investment is set to continue, with the expected $700 million sale of both Top Ryde City regional shopping centre in Sydney and a 25% interest in Westfield Doncaster at close to $400 million by the end of 2010,” Rooney said.

Australian Property Journal