Perth Airport to get Australia’s fifth Direct Factory Outlets
Large format retail is coming to Perth Airport, with Vicinity Centres to develop a Direct Factory Outlets complex on airport land.
Vicinity has entered into an agreement with the airport to build a $145 million DFO Perth, with construction expected to begin in mid-2017 and be completed in 2018.
The project is still subject to planning approval, but the plans include include more than 110 stores spread over 24,000sqm of gross lettable space, with parking for more than 1600 cars.
Vicinity Centres CEO Angus McNaughton says Perth’s lack of outlet centres made it a natural location for a new large-scale retail development.
“We had identified Perth as a prime location for a new DFO asset, with its low representation of outlet centre space. The Agreements provide a unique and exciting opportunity for Vicinity to further solidify its market leading position in Outlet Centres.”
Perth Airport executive general manager of property Steve Holden says Vicinity was a natural choice of partner as the airport sought to develop a major retail component.
“For our cornerstone retail development we wanted to partner with the best in the brand outlet space. Vicinity has a highly successful track record in operating its DFOs and was considered to be the ideal development partner,” Holden says.
DFO Perth will bring Vicinity’s number of Direct Factory Outlets to five, with a portfolio that also includes New South Wales’ DFO Homebush and Victoria’s DFO South Wharf, DFO Essendon and DFO Moorabbin.
Vicinity is projecting an initial yield of 8% on the cost of building the centre, with a 10-year internal rate of return of more than 13%.
McNaughton says the centre has been designed to cater for the potential expansion onto more of the airport’s land in the coming years.
“The asset will be built in a desirable ‘race track’ configuration to facilitate easy access and navigation, with the design allowing for connectivity with, or expansion into, surrounding sites as the airport land is developed over time,” he says.