Families and privates still have the biggest slice of Brisbane’s shopping centres

A handful of family dynasties and their private companies control many of Brisbane’s 150 biggest shopping centres. FULL LIST OF OWNERS

Families remain at the heart of the shopping centre ownership pool in Brisbane although institutions are expected to get an increasing larger slice of the retail pie.

A survey of more than 150 shopping centres, anchored by either a Woolworths, Coles or Aldi in Greater Brisbane, found that private groups hold the most centres while institutions own less than a third of them but dominate the mega billion dollar super regional retail category.

Institutional giants Shopping Centres Australia, ISPT, Scentre Group, Vicinity Group and QIC have more than 25 centres in Greater Brisbane.

Three of Scentre Group’s portfolio — Westfield Chermside, Westfield Garden City and Westfield Carindale — are ranked third, eighth and 12th largest in Australia.

However, families still dominate the neighbourhood shopping centre segment, although many are hands off.

Matthew Sorbello at the Merthyr Village Shopping Centre in New Farm.

One family that remains very hands on are the Sorbellos who own and manage Merthyr Village in New Farm.

Matthew Sorbello, whose father Alf developed the neighbourhood shopping centre between 1991 and 1997, said it was all about creating a community and focusing on the long-term.

“We have treated our operations as a family business and our livelihood as opposed to many owners that likely see ownership of a shopping centre as an investment where the focus is to maximise value at any point in time,” he said.

“Our focus is to create value over the long term by providing sustainable services to the community. We do that by working hard on our tenancy mix. They high quality of the people operating the businesses is ultimately what makes Merthyr Village.

“A long-term focus requires having a reasonable expectation of rents and a lot of patience. If we want a particular service or business we offer them an opportunity to be successful.”

Alf Sorbello in 2001. He amalgamated properties and then developed Merthyr Village.

However, the era of family-owned and operated shopping centres is drawing to a close with the cost of keeping them vibrant and competitive increasing.

The need for continual capital investment is expected to see families exit the sector over time in favour of institutions, but those in the industry believe it will take another couple of decades to play out.

A major reason why institutions and cashed up interstate and offshore players don’t currently have a bigger slice of the market in Brisbane is the success of Asian families who made their home in Queensland in the 1990s and now have intergenerational family business.

They are, in many cases, rags to riches stories

The YFG Shopping Centres is the largest private owner in Australia with 15 in the Greater Brisbane area and 20 in southeast Queensland with its last purchase being Mt Ommaney Shopping Centre for $380m.

The company was started by Gordon Fu, who was reportedly the son of a street vendor and worked his way up from painting cinema posters to building a construction empire before arriving in Queensland in 1992.

Gordon Fu who heads up YFG Property Group.

YFG is a family business who guard their privacy well. It includes Mr Fu’s sons and son-in-law Jack Lin who has other sole ventures.

Genuine richlisters, Mr Fu’s and Mr Lin’s separate fortunes have been estimated to be $1.79bn each.

A friend of Mr Fu’s, Peter Wen, who came to Australia around the same time, has through his Chin Hong Investments company six shopping centres in Greater Brisbane.

While Denis Jen built his business by having the Parker Pen franchise in China before expanding into Singapore and Taiwan. He arrived in Queensland in the 1980s and set up Jen Properties. Mr Jen passed away aged 96 last year. The company now owns seven shopping centres including three in Brisbane and is controlled by his son Winston.

The list also reveals that other well known businessmen like Coffee Club co-founder Emmanuel Drivas, Townsville-based developer Laurence Lancini and billionaire Bob Ell’s Leda Holdings also own a number of shopping centres in Brisbane.

Laurence Lancini.

Don O’Rorke’s Consolidated Properties, who with funding partners, own and operate four shopping centres in Greater Brisbane, including the Great Western Super Centre in Keperra, has been buying, developing and selling retail properties in Brisbane for more than three decades.

“There’s no doubt that over the period we’ve been doing it there has been a consolidation and the ownership has become more concentrated,” he said.

“A reason for that is that shopping centres as an investment needs constant reinvestment. They are not static assets. You have to continue to invest in them and refurbish them, reposition them and provide active management. So in some respects they’re becoming more suited to institutional owners like a REIT (Real Estate Investment Trust).

“I think they will become more institutionalised as time goes on and as prices increase. And what’s driving those institutions is the weight of money from superannuation and sovereign wealth funds pouring into those institutional managers.

“They will have a greater appetite for income producing assets and they will buy up everything that goes on the market. So I think institutional ownership will increase as the prices increase.”

Consolidated Properties chief executive Don O'Rorke.

Mr O’Rorke said the urban sprawl and higher land values have almost eliminated possibility of the construction of new shopping centres in the Brisbane City Council area.

“We are doing a new Woolworths at Yeerongpilly Green but that is probably the exception rather than the rule in the metro area because we need a shopping centre there.” he said.

“It’s been challenging because land is so valuable in the inner city area. It’s hard to get a freestanding Coles and Woolies up in metro areas nowadays and you usually have to have a residential tower on top.”

JLL senior director and joint head of Retail Investments Australia Jacob Swan said Greater Brisbane remained a fragmented shopping centre market underpinned by syndicators and high net worth investors seeking neighbourhood shopping centres.

“They represent great investments and great opportunities for smaller neighbourhood centre investors being in the $20 million to $100 million category,” he said.

“However, they’re very tightly held and the guys who have owned them have owned them for a long time and have done very well.”