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News release

Sydney

Australia records AUD1.75 billion of retail sales in the first quarter

A number of high profile trophy assets currently being traded in the Australian retail market


SYDNEY, 31 MAY, 2010 – A number of Australia’s high profile trophy retail assets have been traded in the past six (6) months, including the ING Retail Property Fund Australia, which sold for a reported AUD 1.4 billion and two (2) of the largest shopping centre transactions since 2007 – Lakeside Joondalup and a 50% interest in Westfield Whitford City, both located in Western Australia.
 
Lakeside Joondalup, a key holding of the ING Retail Property Fund Australia, totals 71,000 sqm and was sold by Jones Lang LaSalle to a joint venture of Lend Lease and the Future Fund for AUD 475 million, at a passing yield of 6.5%. 
 
Lakeside Joondalup, is situated approximately 25 kilometres north-west of the Perth Central Business District (CBD), in one of Australia’s highest population corridors. The centre was sold with short term potential to expand the existing centre to include a Myer department store as a major element of the next retail offer (subject to authority approvals).
 
As a result of this sale process, the balance of the ING Retail Property Fund Australia was subsequently sold direct, for a reported total amount AUD 1.4 billion (including Lakeside Joondalup) to a consortium of Lend Lease managed funds.
Acting on behalf of DEXUS Property Group, a 50% interest in Westfield Whitford City was sold by Jones Lang LaSalle to Singapore based GIC Real Estate, which will now partner with Westfield. The 78,000 sqm asset was sold for AUD 256.5 million, reflecting an initial yield of 6.7%.
 
Westfield Whitford City was rated the sixth best performing regional shopping centre in Australia by the Property Council of Australia’s Big Guns 2009 Survey, on a MAT per square metre basis at $7,950 per sqm. The centre, situated 23 kilometres north west of the Perth CBD, was sold with short to medium term potential to expand the existing centre to include a David Jones department store.
 
Australian Head of Retail Investments, Simon Rooney said Jones Lang LaSalle currently had over $2.5 billion of retail property being marketed nationally, including high-profile opportunities:
 
• Australian Direct Factory Outlet Portfolio. Presented over 326,659 sqm of Gross Lettable Area, the iconic Portfolio consists of 13 high quality assets, at nine (9) locations around Australia, together with an identified development pipeline and significant value creation opportunities. The Portfolio dominates Australia’s niche outlet centre market in Australia, with a market share of approximately 45% and 52% by floor area and number of stores, respectively.
 
• 50% interest in Top Ryde City Shopping Centre in New South Wales. A brand new, super prime regional shopping centre situated approximately 11 kilometres north west of the Sydney CBD and presented over approximately 78,100 sqm.
 
The centre is expected to immediately dominate its large and burgeoning total trade area, estimated at 267,420 people (Source: Pitney Bowes Business Insight) and presents a rare and counter-cyclical opportunity to acquire a prime regional centre in New South Wales’ traditionally tightly held retail property landscape, with the last interest in a regional centre being traded over three (3) years ago.

• Centro Surfers Paradise, Queensland. Forming one half of the ‘Cavill Mall’ on Queensland’s Surfers Paradise, the Centre is a high profile ‘city centre’ based shopping centre, presented over approximately 23,282 sqm. The Centre is being sold together with an existing Development Application Approval for the construction of a 15 level residential tower above the Centre.
 
An International Expressions of Interest program has just closed for another of Australia’s high profile and exclusive retail assets Jones Lang LaSalle is selling – Marina Mirage on the Gold Coast. 
 
Mr Rooney said there was significant capital from both local and global institutions now looking for placement.
 
"The first quarter of 2010 recorded AUD1.75 billion of retail sales, representing nearly 90% of total retail sales volume being traded in the Australian retail property market for the 2009 calendar year. This is reflective of a general stabilisation of core retail asset values and a growing confidence and demand in the various investor markets, particularly for larger institutional high end deals.
This renewed interest is also reflective of the ongoing strength of the Australian economy, robust consumer spending and low income volatility for core and dominant, quality retail assets.
 
The outlook is positive, with a significant pipeline of investment activity expected for the balance of 2010, as investors do not want to miss out on opportunistic buying opportunities and owners looking to sell are encouraged by the increasing investor depth in the market," Mr Rooney said.