The Commonwealth Superannuation Corporation super fund is set to receive up to $1 billion dollars as it lists its Indooroopilly Shopping Centre in Brisbane's Western suburbs.
The former Westfield shopping centre has been owned outright by CSC since 2006 after purchasing an initial interest in 1988.
Funds manager Eureka Real Assets, the investment manager for the $41bn super scheme for public servants and the Defence Force, announced earlier this year that it would seek to sell the centre. It has been jointly listed with JLL and Colliers.
It is speculated that Westfield manager Scentre Group, QIC Real Estate and Vicinity Centres are interested in securing the prime shopping asset.
JLL’s Head of Retail Investments Simon Rooney said, “We anticipate and have already fielded considerable domestic and offshore investor interest in Indooroopilly. It represents the first super-regional shopping centre investment opportunity to be offered on-market since 2010 and with management rights in over a decade.”
Colliers' Head of Retail Investment Services Lachlan MacGillivray said, “The opportunity to own a true super-regional centre represents the ultimate prize in the Australian retail market. Super-regionals have delivered the highest risk-adjusted total return, not just within retail, but of any commercial property sub-sector over the last 15-years, which is why they are so competitively pursued when opportunities arise”.
Originally built in 1971, Indooroopilly was expanded in 1987, 1998 and most recently in 2014 to approximately 116,000sq m of total lettable area. The recent $450 million redevelopment, completed in 2014, resulted in a 30% increase in centre turnover and included the addition of the first Uniqlo and H&M stores in Queensland.
The total site area is approximately 7.8 hectares. The area is identified as a Principal Regional Activity Centre, permitting mixed-use redevelopment on the ancillary land.
MacGillivray said that while the recent redevelopment positioned Indooroopilly for continued long-term outperformance, "The centre’s dominant market position in Brisbane together with several new initiatives currently earmarked for the centre, offer potential purchasers further financial upside via enhanced sales performance and footfall visitation.”
Noting the scarcity factor attached to super-regional centres like Indooroopilly, MacGillivray added, “We are very pleased to be offering Indooroopilly into a market where the leading super-regional centres in Australia are controlled by a small number of owners. Both domestic and offshore capital has been actively seeking exposure to the rarely traded regional shopping centre sector for many years, with little opportunity until now."Rooney said, “Offshore interest in Australian retail assets continues to grow, particularly given the attractiveness of Australia’s market, economic and regulatory fundamentals. Offshore purchasers accounted for 28% of retail transactions in 2015 and 32% in 2016 – the highest proportion since 2007. Australia still offers strong relative value in a global context, particularly for dominant retail assets like Indooroopilly.”
JLL and Colliers will be seeking expressions of interest by Thursday 12 October 2017.