Adelaide Myer Centre sells for $288m
ADELAIDE’S iconic Myer Centre has been sold for $288m in a deal that represents the second-largest retail transaction in South Australia.
A SALE has been agreed for Adelaide’s iconic Myer Centre in a deal that represents the second-largest retail transaction in South Australia.
Singapore real estate investment trust Starhill Global REIT has announced the proposed acquisition of the Myer Centre for $288 million.
JLL’s head of retail investments for Australia, Simon Rooney, negotiated the conditional sale and purchase agreement on behalf of Novion Retail Partnership (NRP).
The Myer Centre was sold by Australian company Novion Property Retail Partnership, which is backed by the Future Fund and the Canada Pension Plan Investment Board.
Novion owns and manages the Castle Plaza centre at Edwardstown.
The Myer Centre sale will provide an initial passing yield of 6.6 per cent, said Mr Rooney.
The sale attracted strong interest from domestic and offshore institutions as well several high net worth individuals, Mr Rooney said.
“Buyers were attracted to this landmark retail and office mixed-use asset, due to its iconic and absolute core location, new long-term lease to the anchor tenant Myer and the significant value-add potential, with the ability to accommodate new, major domestic and offshore retailers,” he said.
The Myer Centre has a history of international ownership - Queensland-based property investor Dennis Jen bought the centre for $151 million in 1995 until he cashed up eight years later.
The largest SA retail transaction however belongs still to the sale of a 50 per cent share in Westfield Marion for $323 million in 2003.
The Myer Centre Adelaide has more than 60,000 square metres of retail accommodation and almost 10,000 square metres of office accommodation and recently had a $35 million upgrade.
Mr Rooney said there has been a notable increase in the volume of transactions in South Australia, indicating strong levels of interest and demand in the region.
“Shopping centre transactions in South Australia have risen to $454.1 million in 2014, from $167.1 million in 2013, heavily boosted by the sales of Arndale Central to Armada Funds Management ($152 million), Golden Grove Village to Challenger ($129.1 million) and Brickworks Marketplace to Charter Hall (for circa $75 million),” he said.
The sales is expected to be completed in by the end of the June quarter this year.
Daniel Gannon, SA executive director for the property Council of Australia, said it was good to see the state had attracted sought-after international investment.
“South Australia is in talent competition with the rest of the country when it comes to targeting foreign investors – there are only so many foreign investment dollars to go around,” he said.
“It’s no secret that our state generally misses out on the foreign investor market, so it’s great news that a Singapore-based real estate investment trust has announced the proposed acquisition of Adelaide’s iconic Myer Centre.
“During tough economic times, we need to do everything we can to attract more investment capital into Adelaide as a destination, and South Australia more broadly.”