Nicholas Street Precinct: ‘Significant’ retail brands in talks over setting up in redeveloped CBD

Talks with retail brands to set up in the overhauled CBD are progressing and ‘significant players’ in the cinema industry are eager to take over the complex in the city centre

An aerial view of the Ipswich CBD.

WITH Ipswich residents eagerly awaiting news about what retail brands will be coming to the redeveloped CBD, a senior council officer says talks are being held with “significant” businesses.

COVID-19’s impact on the retail industry has resulted in the council rethinking its strategy for developing its buildings in the $250 million Nicholas Street Precinct which was adopted by former administrator Greg Chemello.

Ipswich Central Redevelopment Committee chair Marnie Doyle said she knew people were “chomping at the bit” to learn which businesses would be coming into the precinct but the council was not in a position to publicly reveal who they potentially were due to confidentiality issues.

Tulmur Place in the Nicholas Street Precinct opened in November.

At Thursday’s council meeting, acting general manager for infrastructure and environment Sean Madigan said there were 15 heads of agreement with “significant tenants” across the precinct.

“Now comes the time where council looks at those deals, looks at the commerciality of them and looks at what funds council will need to actually put into those precincts and the retail assets in order to get the best tenants in there,” he said.

“Now we have an understanding of the terms that are being sought by the industry.

“A lot of them are seeking what we refer to as capital incentive so that is an incentive of a cash payment if you will from council to the tenant to assist them in the fit-out of their tenancy.

“Before COVID the circumstance of that was a very different market to what we are in now.

“At that time pre-COVID the general real estate industry in terms of retail was looking at smaller capital incentives but with rental abatements over a prolonged period.

“That has now shifted to capital incentives.”

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Mr Madigan said the council has engaged the Queensland Treasury Corporation, which is the central financing authority for the state government, to act as an advisor to review commercial terms and the organisation’s investment model and development strategy.

“We are at a point in the retail development whereby all the hard work over the last 12-18 months in terms of securing tenants and the like is coming to fruition,” he said.

“The strategy adopted under the administrator was to develop the assets, invest the money in them, probably maintain and operate them for a period of two years and then look at divesting those or selling those on the open market.

The Ipswich CBD cinema complex.

“What COVID has done somewhat is flipped the retail market on its head.

“What we are doing with QTC is looking at that model and actually saying what is the best model in terms of ownership, divestment or owning and operating for council to achieve the greatest return on investment to ratepayers.

“The general advice at present is if we were to develop them, spend the money that’s required in terms of capital fit-out and getting them up and running and then sell them (this) may not in fact be the best outcome for the people of Ipswich.”

Mr Madigan said QTC would report its findings back to councillors.

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“As the primary lender of council (it is) concerned with our financial situation given the fact they are the lender to local governments they have an interest in ensuring we achieve the best outcome we possibly can for every dollar,” he said.

The council received “several” submissions from prospective tenants keen to take over its soon to be upgraded CBD cinema complex through an expression of interest campaign.

“We were quite buoyed by the response of that so there are significant players in the cinema operator market who have expressed an interest,” Mr Madigan said.

“Following that process we have then conducted some tours of the facility with those parties.

“Now the next stage is to go out to a competitive tender process with those parties.”

A preferred operator will be presented to council in July.

“We have engaged KPMG to provide some assistance there in terms of financial modelling and assessment of the criteria as well as relevant industry experts such as Knight Frank to look at the commerciality of any agreement that is proposed,” he said.

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Originally published as Nicholas Street Precinct: ‘Significant’ retail brands in talks over setting up in redeveloped CBD