Northland sale underlines mall sector recovery

THE $496 million sale of a 50% stake in Northland Shopping Centre, Victoria, last week marked a full recovery in the large retail mall sector.

The share offloaded by Canada Pension Plan Investment Fund to GPT Wholesale Shopping Centre Fund was the biggest single retail centre deal since the global financial crisis of 2008.

Selling agents Colliers International said it was also the largest transaction in any commercial property asset class so far this year.

Northland is 11km north of Melbourne’s CBD and covers 92,380 sqm, with parking for 4800 cars in the gentrifying suburb of Preston.

Colonial First State Property Retail owns the other half of the centre, which is anchored by a Myer department store and is home to 300 specialty shops and a large cinema complex.

Currently trending is a strong demand for “fortress-style assets”, according to Colliers’ national director of Retail Investment Services, Lachlan MacGillivray.

“There is limited opportunity to buy assets of the size and quality of Norlthland, and we estimate that there is in excess of $10 billion of available capital, both domestically and internationally, chasing major retail centres in Australia,” Mr MacGillivray says.

Meanwhile, the latest retail survey by JLL shows centre managers are moderately positive about the economic outlook despite consumer sentiment having declined 9% since November last year.

The survey of 116 centres around Australia revealed most of them reported positive growth, thanks largely to major tenants such as supermarkets, although specialty retailers continued to struggle.

The flat result since the last quarterly survey has made it difficult to identify whether a sustainable recovery in the shopping centre sector has begun yet.

THE Property Council of Australia has welcomed the Victorian Government’s green light for a sell-off of surplus land adjoining 10 railway stations in the metropolitan area during the next five years.

The sale is estimated to raise $1 billion for state coffers.

The biggest development earmarked is at a site to the east of Federation Square, followed by projects at Werribee East, Coburg, Maribyrnong Defence site, Richmond at Victoria Park.

The Property Council will continue to lobby for the Victorian Government to privatise other land holdings including empty school sites and non-transport related vacant buildings and land.

Already on the market is real estate next to Jewell and Hampton stations, with more land around Alphington likely to be released this year.

THE Queensland government has released a blueprint for the development of a Commonwealth Games village to be built by Grocon at Southport, on the Gold Coast.

The 29 hectare site will be home to 6500 athletes and officials at the 2018 Games.

One of the largest urban renewal projects undertaken by the Queensland government, construction of the village is estimated to generate 1500 jobs and inject $500 million into the local economy.

A STELLAR yield of just 1.88% was recorded for the bumper $3.61 million sale of a café at 88 Kingsway in the bustling Glen Waverley shopping centre last week.

The 168 sqm property on 190 sqm of land returns $68,000 in rent a year. Agents Savills said a local investor bought the shop.

A NEW land value record for Melbourne CBD real estate was set when a Chinese-based buyer paid $5.6 million for the property at 337-339 LaTrobe St.

The transaction clocked $18,600 per square metre, making it the most expensive site in the city on the basis of sqm value. A three-level office and retail building sits on the 301 sqm site.

Savills’ city sales director Nick Peden says the price is “relatively cheap when compared to the major cities of China, Malaysia and Singapore’’.

Some 19 parties bid in the sales process for the centrally located site with three street frontages, which Savills says has good development potential.