This article is from the Australian Property Journal archive
NIKOS Property Group has made the move into major retail centres, buying a 50% interest in Adelaide’s Colonnades Shopping Centre for $138.2 million.
They will join ASX-listed Vicinity Centres as co-owner of the 86,554 sqm regional shopping centre. The centre 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.
“The opportunity to acquire a substantial shopping centre such as Colonnades that is professionally managed by Vicinity is a good opportunity for us and helps diversify our investment holdings,” Nikos’s chief executive Theo Andrianakos said.
The sale represented a healthy yield of 7%. The centre is on 35.8 hectares of land that is the fourth largest shopping centre land holding in the country.
Nikos was established by petrol king Nick Andrianakos, who bought his first fuel station in 1973 before going on to create the Milemaker chain that he sold to Caltex six years ago for $94 million. In 2020, Nikos bought the 50 Flinders Street office building in the Adelaide CBD for $175 million from Cbus Property.
On the sell-side is Perron Group, which put the stake up for sale in February after a decade of ownership. Vicinity had its share on its books at $113.2 million.
Perron Group managing director, Ross Robertson said the sale of the Colonnades stake is consistent with the strategy of releasing capital for investment in other projects, including its proposed $1 billion Cockburn Quarter development in Perth’s southern corridor that will include an expanded shopping centre, hotel, commercial and entertainment precincts, residential area, and improved pedestrian and transport links.
JLL’s Nick Willis and Sam Hatcher managed the sale of the half stake of the Colonnades Shopping Centre.
“The sale is a reflection of the continued theme of major capital partnering evident in the retail space as a result of the strength of the economic recovery, the stabilisation of retail valuations and an increasingly compelling investment outlook for the sector,” Willis said.
“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,” added Willis.
Hatcher said investment supply has remained relatively constrained in the first quarter of 2022, following one of the largest transaction quarters ever on record in final three months of 2021, outperforming the office sector for the first time since 2015. Despite a 13% dip on last year’s opening quarter, the retail sector continued its recent good run and saw $2.7 billion of deals, according to Real Capital Analytics.
“The most aggressive capital continues to be focused on the convenience and large format retail sectors, however, with Colonnades and a number of pending transactions we are continuing to see investor confidence return for quality large regional assets,” Hatcher said.
