QIC’s shopping mall headache a long time coming

THE brutal retail downturn in the US is proving a headache for Queensland’s $80 billion investment powerhouse QIC with money managers scrambing for the exits.

SHOPPING AROUND

THE nervousness over QIC’s investments in struggling US shopping malls has been a long time in the making.

City Beat reported earlier this week that QIC’s former director of capital - global real estate Matthew Strotton left the firm after a 19-year stint to pursue a career in e-sports. Strotton is reportedly not the only departure from the Eagle St investment giant as part of a “strategic review” which City Beat sources say are related to its investments in US shopping malls. Trade publication IPE Real Assets reported last year that Australian fund managers of retail assets, including QIC and Lendlease, had reportedly been besieged by redemption requests, as institutional investors seek to reduce their exposure to the sector. Australia’s wholesale property fund industry was seeing an estimated $5 billion of units come to the market as investors seek to exit or reduce their exposure.

People walk through a nearly empty shopping mall in Waterbury, Connecticut.

Back in 2018, Strotton in a research paper prepared for QIC said there was no question that bricks-and-mortar retail had endured headwinds and “our retailers have needed to adjust for new consumer preferences.”

“But we believe that predictions of the demise of the U.S. mall are overdone.” However less than a year later QIC was preparing to sell stakes in its $1 billion group of shopping centres spanning California, Nevada, Florida and Virginia amid a bruising downturn in retail.

Strotton is still listed as a director of a company called QIC Developments along with Claire Blake, the current QIC chief financial officer. Neither Strotton or QIC have replied to requests for comment.

GOING NUTS

GOOD to see Brisbane attracting another corporate headquarters, this time in the form of the world’s largest macadamia nut company.

City Beat sat down with Marquis Macadamias chief executive Larry McHugh before the new company’s launch function at Howard Smith Wharves on Wednesday night where he revealed big plans to expand an industry that could one day rival the sugar sector in terms of value. McHugh (illustrated), who has been in the macadamia industry since the early 1990s, sees surging demand in markets such as China where the native Australian nut is sold in the shell.

Demand from places such as China has pushed macadamia nut prices to record highs of $5.80 a kilogram. Marquis, which was formed by combining big grower owned companies in Bundaberg and Lismore, is investing big in new equipment as it plans to boost sales to from $250, million to half a billion dollars in the next five years.

Marquis Macadamias CEO Larry McHugh.

McHugh says Bundy is now one of the biggest macadamia growing areas in the country as cane farmers shift to a crop that fetches a better price. “In the long term is it a better cash crop than sugar,” he says.

ROUGH RIDE

A City Beat reader is having a very nasty punch up with the people running the Qantas Frequent Flyer points program.

The reader, who has been a loyal Qantas customer for many years, gifted a whopping 200,000 points to a family member who is also a Qantas Frequent Flyer card holder. That’s almost enough to fly around the world in premium economy. But when the family member’s circumstances changed and they had no need for the points they graciously attempted to return them to our reader. That’s when the trouble started with Qantas refusing to allow this because the person had not acquired any points for the past two year and has been living overseas. Qantas explained that the only way any of the points can be transferred is if the family members join what it calls the “active points program” in which case only 50 per cent of the points can be returned. Our reader is understandably not happy with that explanation. “What a wonderful way for Qantas to reward customer loyalty,” our reader thunders, adding he has now written to Qantas chief executive Alan Joyce about the matter.

Qantas CEO Alan Joyce.