Another Adelaide CBD shopping icon hits the market
Adelaide’s famous Rundle Mall could be transformed after one of its major shopping and office complexes was opened up to investors.
The South Australian-based Makris Group is selling the City Cross shopping centre and its adjoining headquarters at 32 Grenfell St, marketing the properties as a potential large-scale CBD development site.
Local and international developers are tipped to swoop on the site, which could be reborn as a retail, residential and office precinct.
The sale continues the transformation of Adelaide’s CBD, which in recent years has seen refurbishments to the Myer Centre Adelaide and Adelaide Central Plaza, and major upgrades to Rundle Mall itself.
It will mark the third significant sale in the Rundle Mall precinct in the past 12 months, after Blackstone paid $400 million for Rundle Place and 80 Grenfell St and Singapore’s Starhill bought Myer Centre Adelaide for $280 million.
JLL’s Simon Rooney and Jamie Guerra have been appointed to sell City Cross and 32 Grenfell St, with Rooney expecting significant developer interest.
Developers will be attracted to City Cross due to its absolute prime location in the core of the Adelaide CBD
Rooney says the site has the potential to house the existing retail centre as well as a 22,490sqm office tower, 316 apartments and a 56-bed student accommodation tower.
“Developers will be attracted to City Cross due to its absolute prime location in the core of the Adelaide CBD, with frontages to four key streets, its substantial holding income and the ability to unlock significant future value by creating a major mixed-use development subject to Development Assessment Commission approval,” Rooney says.
“Development opportunities are an attractive proposition for investors, presenting the opportunity to generate higher returns than that for existing assets which may not meet their return hurdles.”
“Undertaking major redevelopment will also allow developers to create investment product in a market where opportunities to acquire existing assets are becoming more limited and where competition remains strong.”
City Cross is home to a number of major retailers, including Harvey Norman, A-Mart Sports, two mini-majors, 55 specialty stores and kiosks and four office tenancies.
It currently attracts an annual holding income of around $6.448 million.