This article is from the Australian Property Journal archive
QIC is looking to capitalise on its decade-long investment in Perth’s premium shopping centre Claremont Quarter, in what is expected to be a highly contested campaign with retail becoming in fashion again for opportunistic investors.
QIC has put its 50% stake in Claremont Quarter on the market, the asset is jointly owned with Hawaiian.
QIC is selling the asset after riding through the cycle, having acquired the shopping centre over a decade ago, in February 2013 from Brookfield Asset Management for $171.5 million, paying a premium to the book value of $161.7 million, at the time.
CBRE’s Pacific Head of Retail Capital Markets Simon Rooney and McVay Real Estate’s Sam McVay have been jointly appointed to handle the sale amid renewed heightened interest in shopping centres.
Elanor Investors Group’s head of retail Matt Healy recently said in Australian Property Journal, that the retail property market is presenting an opportune moment for investors to seize new opportunities.
Healy said the fundamentals of the retail sector remain undeniably strong. Despite high profile commentary around the spike in cost of living and the rise of online shopping, the retail sector represents attractive cash yields relative to other sectors of office, industrial, and alternatives. In fact, it has been the highest yielding commercial property sector on average since 2018.
A circa $1.2 billion in major shopping centre have changed hands since the start of 2023, with an additional $1 billion of transactions currently in play, including Lakeside Joondalup (50%) and Westfield Whitford City, both in Western Australia. This followed an unusually strong December 2023 quarter that saw $3 billion of assets traded. Although much of the recent activity in the sector has been focused around neighbourhood shopping centres. Charter Hall acquired Eastgate Bondi Junction in February for nearly $127 million. ISPT put the portfolio to market as it separately sold the Brisbane home of fast fashion giants H&M and Uniqlo for $145 million.
Last month Centuria Capital Group acquired the Coles and Aldi-anchored Halls Head Central sub-regional shopping centre from ISPT in a $70 million counter-cyclical play.
The asset was secured at circa 40% below its independently assessed replacement cost.
Rooney said the WA retail market has robust underlying fundamentals, benefiting from population growth, booming commodity prices, strong residential value growth, higher levels of disposable income compared to the national average and a relatively affordable cost of living – all drivers for retail demand.
“There are limited opportunities to add supply, particularly as the construction labour market remains tight. Pricing for real estate in Perth is also attractive in an Australian context. We expect investment activity will remain elevated with multiple large retail assets currently in play, in what traditionally has been one of the more tightly held markets in Australia.
“Claremont Quarter will be competitively contested by a wide range of domestic and offshore groups given the centre’s standing within the surrounding retail hierarchy, turnover performance, attractive investment fundamentals, secure tenancy profile and strategic location within one of Perth’s most affluent catchments.”
McVay said the centre was set to benefit from the recently commenced Claremont Quarter Laneway project which marked a significant milestone for the asset.
“Once complete, the reimagined Laneway will deliver an engaging dining precinct with elevated food and beverage offerings. This is line with the Town of Claremont’s broader vision for the area and will strengthen the suburb’s position as a destination for shopping, restaurants, bars, nightlife attractions and community events,” McVay said.
Located approximately 9km south-west of the Perth CBD, in one of the city’s most prestigious suburbs, on a landmark 2.7ha site. The centre has gross lettable area of 29,800 sqm and is anchored by David Jones, Coles and Jack’s Whole Foods & Groceries, supported by five mini-majors and 118 speciality stores, as well as luxury retailers Zimmermann, Sass & Bide, Chanel and Georg Jensen.
The International Expressions of Interest campaign for Claremont Quarter is expected to close in mid to late August.
