Rundle Place to sell to Sydney investment group Fortius Funds Management for $215m
The former home of Harris Scarfe in Rundle Mall will be sold to a Sydney investment group, which is now looking for someone to take over the huge vacant space.
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A $215 million sale of the Rundle Place shopping mall is expected to be finalised in the coming days as the retail property sector shrugs off the impact of the COVID-19 crisis.
Sydney investment group Fortius Funds Management is expected to complete the takeover of the centre from private equity group Blackstone.
Fortius is seeking investors to contribute to an investment fund to oversee Rundle Place, describing it as a “value add” opportunity.
“We have secured the property at a compelling price, below replacement cost and with significant upside,” the company says in its pitch to investors.
Harris Scarfe closed its flagship Adelaide store in Rundle Place earlier this year after the retailer fell into the hands of administrators.
Renew Adelaide – which connects start-ups with short-term, rent-free accommodation in vacant properties – had been engaged to find tenants for part of the space left vacant by Harris Scarfe, but the campaign was brought to an end by the COVID-19 pandemic.
Fortius says it will embark on a leasing campaign for the centre’s vacant space – currently 23 per cent of the 23,000sq m of retail floor space – and a “remixing of existing tenancies”.
The investment group has a history of turning around shopping malls, and describes Rundle Place as “remarkably similar” to the MidCity Centre in Sydney’s Pitt Street Mall.
Completed in 2013, the five-level Rundle Place centre is anchored by a Coles supermarket, is home to Adelaide’s only Apple store, and accommodates 60 specialty retailers in food, fashion and other services.
Its sale includes an adjoining 506-space carpark on Grenfell Street, which Fortius describes as having “significant value-add potential for future redevelopment”.
Investment groups Cromwell and AMP Capital had previously signalled an interest in acquiring Rundle Place after it hit the market last year but a deal with Blackstone was never reached.
The sale is being handled by Knight Frank’s Guy Bennett in Adelaide and McVay Real Estate’s Sam McVay in Sydney.
Mr Bennett would not comment on the deal. Mr McVay and Fortius have both been sought for comment.