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Sophisticated and institutional investors are backing a retail property revival, with a spurt of major transactions indicating increased confidence in the sector.<\/p>\n
Sophisticated and institutional investors are backing a retail property revival, with a spurt of major transactions indicating increased confidence in the sector.<\/p>\n
The flurry of interest in retail assets is being underpinned by rising confidence among Australian retailers, who are looking forward to bumper trading conditions in the lead-up to Christmas.<\/p>\n
A recent survey of Australian retailers by Deloitte showed 80 per cent expected sales growth in 2021, with more than half expecting sales to bounce back rapidly with Melbourne and Sydney now out of lockdown.<\/p>\n
Nearly 90 per cent of respondents said they expect trading conditions to improve over the next 12 months.\u00a0<\/p>\n
Highlighting recent transactional activity was Hong Kong-listed Link Asset Management splashing $538.2 million on a 50 per cent share in three prominent retail properties in the heart of the Sydney CBD<\/a>.<\/p>\n The assets, comprising the Queen Victoria Building, The Galleries and The Strand Arcade, will continue to be managed by shopping centres giant Vicinity Centres under a strategic partnership.<\/p>\n Link Asset Management chief executive George Hongchoy said the portfolio had been offered to the market for the first time.<\/p>\n \u201cGiven the high occupancy rate filled with leading Australian and international brands, the portfolio is well-positioned to capture the retail rebound with the improving consumption sentiment in the country,\u201d Mr Hongchoy said.<\/p>\n \u201cCoupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential.\u201d<\/p>\n The transaction is expected to settle by the first half of next year.<\/p>\n Meanwhile on the Gold Coast, Sunland Group sold the yet-to-be-built The Lanes retail village at Mermaid Beach<\/a> to retail investment specialist Panthera Group, in a deal worth $45.8 million, brokered by Kollosche Commercial.<\/p>\n The Lanes is proposed to be a 12,500 square metre shopping precinct that will feature a fresh food market hall, cafes, restaurants, a medical centre and office space.<\/p>\n Commercial agent Adam Grbcic of Kollosche said the sale was one of several Gold Coast retail properties that changed hands in October, following the sale of a majority stake in Pacific Fair for $2.2 billion, and a 50 per cent stake in Harbour Town for $385 million.<\/p>\n \u201cPanthera has correctly identified the Gold Coast can do with an injection of high-quality retail offerings, particularly when underpinned with apartments,\u201d Adam Grbcic said.<\/p>\n \u201cWe were able to show to Panthera the sector has strong long-term growth prospects, particularly when interstate and international travel opens up.<\/p>\n \u201cWe have seen a massive vote of confidence in the retail sector with Cbus Super and UniSuper taking a majority stake in Pacific Fair and Vicinity Centres buying a half share of Harbour Town.<\/p>\n \u201cThe sale of The Lanes centre, which is likely to be completed in 2023 or 2024 is further proof the sector is in good health.\u201d<\/p>\n Kollosche\u2019s Tony Grbic said there were several solid market fundamentals that were underpinning the growth cycle in big retail assets.<\/p>\n \u201cThis isn\u2019t like the boom and bust cycles of the past,\u201d he said.<\/p>\n \u201cInvestors who have sold off residential properties are looking to invest their cash in commercial assets that come with high yields in a place which hasn\u2019t been as affected as Sydney and Melbourne with lockdowns.<\/p>\n \u201cAll this means is the future prospects are looking excellent.\u201d<\/p>\n Tony Grbic said the Gold Coast\u2019s residential property boom had piqued the interest of a range of developers, with residential players scrambling for sites from Broadbeach<\/a> to Coolangatta<\/a>.<\/p>\n \u201cThis residential market is fueling interest in retail investments, which makes sense because the retail pie is getting larger to meet the increased demand from residents and visitors,\u201d he said.<\/p>\n