Adelaide’s Rundle Place in line for $250m sale

Rundle Place, seen here to the right of 80 Grenfell Street, has caught the eye of AMP Capital.
Rundle Place, seen here to the right of 80 Grenfell Street, has caught the eye of AMP Capital.

Funds manager AMP Capital is set to become the latest company to defy the gloom around the retail sector as it eyes the purchase of Adelaide’s Rundle Place for close to $250 million.

The property is being off­loaded by private equity group Blackstone, with the deal showing that the best retail assets are trading even as the market pricing is reset for less desirable centres.

The sale also demonstrates that deep demand remains for city retail assets, particularly for top-class malls. The best assets, including Stockland’s Glasshouse complex on Sydney’s Pitt St, are attracting strong interest.

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Guy Bennett of Knight Frank and Sam McVay of McVay Real Estate are handling the deal but they and the parties were not available for comment.

The pile of shopping centres hitting the market is building as GPT joined Vicinity Centres and Challenger in putting assets to market last week.

GPT’s wholesale fund put a property in Sydney’s Leichhardt on the block for about $150 million, and other players, including Dexus’s fund unit, are also selling.

But some local groups are also buying, with Charter Hall swooping on Stockland’s Caloundra centre for about $105 million.

While the purchases being made are subject to due diligence, they show that a floor is being established for centres. Some are trading at a premium to book.

WA-based Perron Group this week took up a half stake in the Westfield Burwood shopping centre, buying it from mall landlord Scentre Group for $575 million at a 4% premium.

Adelaide’s Rundle Place was completed in 2013 and is a five-level shopping centre on a prime location on Rundle Mall. It includes a 506-space carpark.

The centre comprises more than 23,000sqm of retail space and is anchored by a full-line Coles supermarket and a Harris Scarfe store, and has an Apple store and national specialty and mini-major chains.

Blackstone sold the attached 80 Grenfell St office tower, which houses the Bendigo and Adelaide Bank, last year to Centuria Capital and billionaire Paul Lederer for $185 million.

Blackstone has also tapped real estate agent CBRE to sell Brimbank Shopping Centre for about $170 million. The single-level subregional shopping centre in Melbourne’s northwest is anchored by Woolworths, Coles, Target and Aldi, and has more than 80 specialty stores.

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