AMP Capital is looking to stamp its authority on Brisbane’s retail property market with the purchase of a $1 billion stake in the Indooroopilly Shopping Centre.
The group, which already manages one of the best shopping centre networks in the country, is believed to be heading the field to buy the Commonwealth Superannuation Corporation’s half stake in Indooroopilly Shopping Centre, marking one of Australia’s biggest shopping centre deals this year.
It is also a sign of confidence in shopping malls, which remain under pressure from the general downturn in retail sales and the looming threat from Amazon as it plans an entry into the Australian market.
The offer of the interest attracted a who’s who of Australian retail property with Scentre, GPT Group and a tie-up between ISPT and Stockland showing interest, as well as local heavyweight QIC and the John Gandel-backed Vicinity centres.
The stake was offered, via Simon Rooney JLL and Lachlan MacGillivray of Colliers International, with valuable management rights attached, and was the first such sale of a super-regional shopping centre in more than a decade.
If AMP Capital is able to finalise a deal, it will have the chance to bolster the performance of the centre, which could be redeveloped in parts and repositioned to also accommodate international retailers that are a feature of the group’s other major centres in Sydney, the Gold Coast, Perth and Melbourne.
Scentre, which has a dominant position in the city, had said would look at the property and is rumoured to have shown interest in buying the entire landmark centre.
It would have held a dominant position in the city but now could face a challenge from AMP Capital that will be looking to revitalise the centre.
Funds manager Eureka Real Assets, which acts as the investment manager for the $41bn super scheme for public servants and the Defence Force, in June began a sale process for the massive 116,000sq m retail complex.
CSC has owned the Indooroopilly Shopping Centre in its own right since 2006, after acquiring an initial interest in 1988. Its annual retail turnover is $667m.
It completed a $450m renovation in 2014 following a 30-month process to expand the centre from 86,780sq m.
It now has two department stores, Myers and David Jones, a Kmart and Target, Coles and Woolworths, a 16-screen cinema and more than 350 shops. The centre’s vacancy rate is less than 1.5 per cent.
Indooroopilly is the pre-eminent centre servicing the inner western and southwestern suburbs of Brisbane and the impending sale will set fresh benchmarks across the sector.
Australia’s shopping centre sector is split between soaring values for key assets and sluggish growth for smaller assets.
The strong result in the race for the CSC’s half-stake in the Indooroopilly bodes well for the valuations on many of best malls held by listed groups.
The Brisbane centre also has significant upside in the medium term as apartments can be developed around it and AMP is pursuing a strategy to build town centres with residential units around is centres in Sydney and Perth.
The parties and agents declined to comment.
QUT Buys $84m Kelvin Grove Office Building
The seven-storey building is a cornerstone building of the inner north Brisbane business hub and has gone unconditional to the main tenant, QUT, with settlement due in April 2018.
QUT leased 9,474sq m from the Queensland-based Cromwell Property Group in the building prior to the acquisition.
In an ASX statement Cromwell chief executive Paul Weightman said Musk Avenue had been a strong 10-year investment.
“Musk Avenue is another example of Cromwell’s ability to invest wisely and actively manage our assets. We continuously review our property portfolio to deliver optimal returns for our investors,” Weightman said.
At its half-yearly results in February, Cromwell announced pro-forma gearing of 38.9 per cent exclusive of the contracted sale of the property.
The office building comprises ground floor retail, six floors of office space and 217 basement carparks.
The 14,144-square metres of net lettable area is leased to QUT, Boral Resources and three ground floor retail tenants.
The building has a 5-Star Green Star Rating and a 5.5-Star NABERS Energy Rating.
On Thursday, Singapore-based ARA Asset Management Limited picked up a 19.5 per cent stake in Cromwell in a deal worth $405 million.
Originally Published: theurbandeveloper.com
Iconic Queensland Pub the Normanby Hotel Up for Sale
Located at the high profile Normanby Fiveways in inner-Brisbane’s Red Hill it has been co-owned by Michael Dempsey and Otto Wilhelm since 1999.
Built in 1890, the heritage-listed hotel consists of an enormous 3,655 square metre site incorporating the multi-level heritage listed pub and a huge car park. It was added to the Queensland Heritage Register in 1992.
Dempsey said he was selling the hotel in order to concentrate on his core business of property technology through real estate property management software, Console.
He sold his electronics payments business Ezidebit for $305 million in 2014.
The Normanby Hotel freehold and pub operation is being offered for sale by CBRE Hotels.
“The hotel boasts huge underlying value with 35 gaming machines on site offering significant gaming upside potential,” CBRE Hotels’ Queensland director Paul Fraser said.
“On top of this, the prime location of the hotel and the huge expanse of land this asset offers makes it an obvious development play in the future.”
In 2016, a proposal by The Normanby Hotel to build a 15-storey development and underground nightclub next to the hotel was rejected by Brisbane City Council’s City Planning Committee.
The building, which would have contained 14 units, a hotel, short-term accommodation, a nightclub and a shop, was planned to be built on the Normanby Hotel’s car park. The committee voted unanimously in favour of opposing the plans on the basis of the height and size of the proposed hotel tower.
The Normanby Hotel also used to house one of Brisbane’s most well-known trees, a 100-year-old fig tree, that had to be removed from the site in 2016 after a severe storm knocked it over.
Originally Published: theurbandeveloper.com
Sydney to Hobart veteran Peter Harburg selling remaining $150m properties
Sydney to Hobart sailing veteran Peter Harburg has made a call to sell two of his last major office towers in Brisbane worth well over $150 million, including Westpac’s local headquarters.
Mr Harburg, who has completed 12 Sydney to Hobart races in the famous Blackjack yacht, said the market was strong and that influenced his decision to sell out.
“I’m 76 now and I think it’s time to start doing more important things like sailing boats and driving cars,” Mr Harburg told The Australian Financial Review.
“The market is very strong at the moment – it’s a supply and demand thing and at the moment the demand is very strong and this has certainly helped influence the decision to sell.”
Peter Harburg on his boat Blackjack. “I’m 76 now and I think it’s time to start doing more important things like sailing boats.” Glenn Hunt
Mr Harburg acquired a number of Brisbane office buildings over the years, including 50 Ann Street which he has since sold for $131.8 million to Asian group Capital Trust and 348 Edward Street Brisbane which he sold to US property group Hines for about $50 million.
Now his private investment company Harburg Investments has appointed CBRE’s Bruce Baker, Tom Phipps and Flint Davidson to steer the sale of his remaining CBD assets – 260 Queen Street and 95 North Quay – with the assets to be offered either as a portfolio or individually.
Mr Baker said the campaign was expected to attract significant interest given that both properties were extremely well located and offered different income streams and capital-related outcomes.
“Last year was a very active year for the Brisbane office investment market, with new investors and foreign capital attracted by the comparatively attractive yield spread to Sydney and Melbourne,” Mr Baker said.
“A well-researched consensus is that Brisbane offers net effective rental growth going forward over the next five years, with Brisbane having become the second fastest growing white-collar employment market in the country.”
The agents describe the tower at 260 Queen Street – occupied by anchor tenant Westpac since it was constructed – as an “iconic core office asset and arguably Brisbane’s best located asset”.
The building has a net lettable area of 13,300 square metres and offers large 1000sq m podium floor plates with 20 high-rise floors above.
A prime retail amenity is located on the ground floor, the majority of which is occupied by Westpac as a retail banking chambers.
“The building’s super prime Queen Street location near Central Train Station and the Queen Street Mall shopping precinct will be a key drawcard for prospective purchasers and tenants alike,” CBRE’s Mr Phipps said.
“There is existing development approval for a glass box-style podium refurbishment as well as the potential to extend the existing floor plates and/or reconfigure the retail space.”
The boutique A-grade building at 95 North Quay, in Brisbane’s legal precinct, is predominantly occupied by barristers and legal professionals and provides a current net lettable area of 8710sq m.
“While the building is currently 58 per cent occupied, there is a clear opportunity to ‘re-set’ the asset to capitalise on Brisbane’s improving occupier market,” Mr Phipps said.
Originally Published: www.afr.com
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