AMP Capital funds snare a half stake in Indooroopilly Shopping Centre for $800 million

RELIEF could be in sight for shoppers and retailers at a trouble-plagued Brisbane shopping centre with new management coming in, after a half stake in the site sold for a whopping figure.

Half share in Indooroopilly Shopping Centre has sold for $800 million,

RELIEF could be in sight for shoppers and retailers at the trouble-plagued Indooroopilly Shopping Centre with new management coming in.

In what is Australia’s largest ever single-asset retail deal, a half-stake in the Indooroopilly Shopping centre has sold for $800 million.

The AMP Capital Shopping Centre Fund (ACSC) and the AMP Capital Diversified Property Fund have each acquired a 25 per cent stake in Indooroopilly Shopping Centre from Eureka — Real Assets, acting on behalf of Commonwealth Superannuation Corporation.

Part of the deal will see AMP Capital has assumed management of the super-regional centre in Brisbane’s inner west.

New management could bring relief for the trouble-plagued centre. Picture: Annette Dew

ACSC Fund manager Conrad Sinclair said the acquisition of a stake in Indooroopilly Shopping Centre was is in line with the fund’s strategy of owning super-regional retail assets that dominate their trade area and with further potential for expansion.

“The fund’s investors now have an 81 per cent exposure to regional and super-regional shopping centres,’ he said.

“The deal follows a successful $200 million equity raising for ASCF, which was oversubscribed indicating the appeal these assets hold for investors.”

JLL’s Simon Rooney and Lachlan MacGillivray of Colliers International ran the campaign in what was the first sale of a super-regional shopping centre in more than a decade.

Mr Rooney said the campaign received significant domestic and offshore interest.

“Dominant super-regional shopping centres are rarely traded, tightly held and the opportunity to gain management rights was a major attraction to the leading industry operators looking to expand their platform,” he said.

“Investors globally are focusing on major shopping centres which dominate their trade area and offer customers an all-encompassing retail offering.

“Given the accelerated rate of change in global retail trends at present, investors are positioning their portfolios towards highly resilient assets which can outperform by delivering solid risk-adjusted returns.”

Mr MacGillivray said Indooroopilly Shopping Centre was the first highly competitive on-market test for pricing benchmarks in the last few years.

“Selling for a sub-4.5 per cent yield, Indooroopilly services the inner western and southwestern suburbs of Brisbane and represents one of only four super-regional centres in Brisbane,” he said.

Originally built in 1970, Indooroopilly was expanded in 1987, 1998 and most recently in 2014 which included a multimillion-dollar car park refit which resulted in car park gridlock during peak periods, with shoppers unable to exit for hours.

Dozens of retailers left the centre and in 2016 more than 100 store owners and managers joined forces in a push to try to get rid of the centre’s management team.

The shopping centre is anchored by two Department Stores, Myer and David Jones; two Discount Department stores, Kmart and Target; two supermarkets, Coles and Woolworths; a 16 screen cinema; 14 mini majors; more than 300 specialty shops; and at-grade and covered parking for close to 4600 cars.

The recent $450 million redevelopment, completed in 2014, included the addition of the first Uniqlo and the first H & M stores in Queensland and gross lettable is more than 116,000 sqm..

The total site area is about 7.8ha and includes surrounding, highly strategic land holdings, offering further development potential. The area is identified as a Principal Regional Activity Centre, permitting mixed use redevelopment on the ancillary land.

AMP Capital Global Head of Real Estate Carmel Hourigan said Indooroopilly Shopping Centre is in the sweet spot of what AMP Capital does well for its investors.

“Indooroopilly Shopping Centre and its customers will also benefit from AMP Capital’s high-quality and well-established retail management team, which looks after a stable of similarly high-quality assets,” she said.

She also said customers will benefit from the fund manager’s well-established retail management team, which looks after a stable of similarly high-quality assets.