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Largest retail transaction in Australia for 2015 & in South Australia since 2003
Starhill Global REIT has announced the proposed acquisition of Myer Centre Adelaide at a purchase consideration of AUD 288 million. JLL's Simon Rooney has exclusively negotiated the conditional sale and purchase agreement for Myer Centre Adelaide, on behalf of Novion Retail Partnership (NRP).
The Myer Centre Adelaide sale reflects an initial passing yield of 6.6%.
According to JLL's Head of Retail Investments for Australia, Simon Rooney, "The sale process attracted strong interest from a broad range of domestic and offshore institutions and interestingly for an asset of this large capital size, a number of high net worth individuals.
"Buyers were attracted to this landmark retail and office mixed use asset, due to its iconic and absolute core location, new long term lease to the anchor tenant Myer and the significant value add potential, with the ability to accommodate new, major domestic and offshore retailers."
The sale of Myer Centre Adelaide for AUD 288 million represents the second largest retail transaction in the South Australian market, following the sale of 50% share in Westfield Marion in 2003 for AUD 323 million.
"We continue to see built-up unsatisfied demand from offshore investors for direct property exposure to Australian retail assets," said Mr Rooney.
The proposed acquisition by YTL Starhill Global REIT follows TIAA Henderson's purchase of Greenwood Plaza and 101 Miller Street in North Sydney (AUD 308 million) and a 75% share in Mt Ommaney Shopping Centre in QLD (AUD 416.25 million), both in October 2014.
"Offshore investors accounted for 15% of the buyers in 2014 which is only slightly above the long term average (12%), but this largely reflects the shortage of assets of significant scale that are available for purchase by these major offshore institutions," said Mr Rooney.
Myer Centre Adelaide is located within one of South Australia's most established and visited retail precincts - Rundle Mall. Myer Centre Adelaide comprises over 60,000 square metres of retail accommodation and almost 10,000 square metres of office accommodation.
Myer Centre Adelaide is anchored by a newly refurbished flagship Myer store and a quality offering of mini-major tenants and retail specialty stores, including Rebel Sport and Lincraft. The centre has recently undergone a $35 million upgrade including a complete refurbishment of Myer's 30,000 square metre tenancy. The 601-seat food court is the largest food court in the Adelaide CBD, aided by close proximity to train, tram and bus services and is a major attraction to office workers, students and tourists.
Myer Centre Adelaide features eight mini-major tenants, 88 specialty tenancies, 11 kiosks, six ATMs and 467 basement car parking spaces. The office accommodation within the centre features across 31 tenancies and is accessed via North Terrace.
Adelaide has undergone a transformation in recent years with a number of major projects having been completed and more in progress, all within a short walking distance to MCA.
Mr Rooney said there has been a notable increase in the volume of transactions in South Australia, indicating strong levels of interest and demand in the region. "Shopping centre transactions in South Australia have risen to $454.1 million in 2014, from $167.1 million in 2013, heavily boosted by the sales of Arndale Central to Armada Funds Management ($152 million), Golden Grove Village to Challenger ($129.1 million) and Brickworks Marketplace to Charter Hall (for circa $75 million)."
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Note to Editors:
Classifications for shopping centre formats is below:
CBD: The main commercial centre of a metropolitan area. Retail forms found within the CBD include strip shops, enclosed arcades and very large shopping complexes.
Regional Centres: Major centres that are department store based (e.g. Myer and David Jones). These centres often contain more than 200 speciality shops and several other major tenants.
Sub-regional Centres: Centres that are discount department store based (e.g. K-Mart, Target and Big W).
Neighbourhood Centres: Enclosed centres containing at least one supermarket and specialities.
Bulky Goods: The sale of low cost/high bulk goods, such as furniture, electrical goods and building products. May be freestanding, in enclosed centres or within retail warehousing parks.
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