This article is from the Australian Property Journal archive
FUND manager QIC Global Real Estate forked out a circa $1 billion to buy half stakes in the Werribee Plaza and Pacific Epping shopping centres in Melbourne, on a combined yield of around 4.5%.
QIC reached due diligence over the summer for the two Melbourne centres after Pacific Group of Companies, overseen by prominent property player Maurice Alter, put the 50% interests to the market late last year.
Major retail landlords are now looking to capitalise on repositioning and expansion works recently undertaken in a bid to stay ahead of the challenging retail climate, or further enhance their portfolios.
Colliers International’s Lachlan MacGillivray negotiated the off-market transaction, which was reportedly recorded on land titles last month, and is set to be one of the biggest retail transactions for 2018.
Werribee Plaza, in Melbourne’s south-west, recently underwent a $400 million redevelopment, taking its floor area from around 80,000 sqm to more than 107,000 sqm. Key tenants include Myer, Coles, Woolworths, Big W, Kmart, and JB Hi-Fi, while H&M and Uniqlo opened as part of the overhaul in 2016. It also has a Village Cinema complex.
Located in the northern suburbs, Pacific Epping has a floor area of around 74,000 sqm and construction is underway for a $40 million, 14,000 sqm Costco supermarket. It currently features Coles, Woolworths and Aldi, as well as JB Hi-Fi, Harris Scarfe and Big W.
QIC and Pacific will both manage the centres.
Meanwhile, private equity giant Blackstone is currently shopping around its Top Ryde City asset in Syndey’s north-west to investors, hoping to fetch $700 million after snapping it up from receivers for $341 million five years ago.
The US-based group has spent $90 million on refurbishments and expansion, taking its lettable area to 76,958 sqm and weighting the asset towards non-discretionary trade. Since 2012, its moving annual turnover has jumped by 40.7%.
This week, GPT pulled the plug on its proposed sale of the 56,600 sqm Wollongong Central following a three-month expressions of interest campaign that it hoped would fetch interest north of $500 million. It recently spent $68 million to reposition the asset, introducing a new generation David Jones department store, TK Maxx, H&M and Mecca Maxima. Tenants also include Coles, Target, H&M and more than 170 specialties.
A GPT spokesperson told Australian Property Journal that the fund was unable to find a buyer to acquire a 100% interest in the centre, and decided to take the property off the market rather than drag out the sale campaign.
That followed Vicinity Centres’ announcement on Monday that it would offload $1 billion of its non-core centres as it continues to optimise its higher-end assets.
Moody’s Investors Service estimated retail property trusts were plunging $1.6 billion into Australian mall redevelopments throughout the 2018 financial year, amid a rush to enhance the experiential aspect of their assets and navigate the difficult retail environment.
Vicinity, Scentre and Stockland were calculated to make up around 80% of that figure.
JLL’s latest Retail Centre Managers’ Survey showed a number of landlords are transitioning their tenant profiles with retailers who are less likely to be disrupted by online retailing, with food and beverage operators, as well as health, gyms, medical centres, other medical-related services and insurance that are expanding in shopping centres.
Australian Property Journal
