Billionaire Con Makris selling $200m of shopping centres
One of the properties is seen as a prime redevelopment opportunity.
Billionaire Con Makris is looking to defy the coronavirus crisis with the sale of two prime shopping centres in Adelaide and another centre on the Gold Coast as he switches his private empire towards more passive holdings.
The centres are in states that have dodged the worst of the pandemic and could attract counter-cyclical buyers who are hoping to unlock the usually tightly-held retail assets.
The private tycoon has put Adelaide’s City Cross Shopping Centre and office complex and the North Adelaide Village neighbourhood shopping complex, and an adjoining site, on the block for about $200m.
CBRE’s Simon Rooney and James Douglas are handling the sale campaign and the assets could be split up.
Mr Makris is also fielding interest in the Marina Mirage centre on the Gold Coast, with a party in advanced talks to pick up the asset.
He paid $52m for Marina Mirage in 2013 and although the centre, dominated by shops selling international labels, is quiet as tourism has dropped, it is seen as a prime redevelopment opportunity.
The tycoon also picked up the marina at the front of the centre from receivers for $7.1m and there are plans to expand that property.
Star Entertainment Group, which owns the nearby Sheraton Grand Mirage with its Asian consortium partners, has flagged it will upgrade the hotel and it is also tipped to show interest in the Gold Coast property.
Mr Makris’s private company has grown to become South Australia’s largest privately-owned retail property group.
Founded by Mr Makris in the 1980s it has a large, diversified portfolio across retail, commercial and maritime sectors.
Mr Rooney said the SA offering was expected to generate significant interest given the development potential and value add opportunities.
“Investors who have been both priced out of the east coast markets and have struggled to find high quality product have turned to Adelaide for better yielding opportunities,” Mr Rooney said.
Returns on Adelaide retail centres are traditionally higher than Sydney and Melbourne and the city has returned to normal trading while the larger capitals still have restrictions in place.
South Australian retail is attracting investors and funds manager Fortius is buying Adelaide’s premier retail centre, Rundle Place, for about $215m.
In keeping with the state of retail property it has picked up the mall at below replacement cost and with significant upside. It plans to lease up the centre to generate hefty returns for investors.
The City Cross centre is nearby and also offers the opportunity for a repositioning. It already includes anchor tenants Harvey Norman, Rebel Sport and Australia Post, alongside 57 specialty tenancies.
Mr Rooney said City Cross provides the opportunity to acquire a major retail CBD holding, with potential for mixed-use development including commercial, residential and hotel elements.
“This will be a key investor drawcard, as will the outlook for Adelaide CBD retail rents, which are expected to hold up well, in part underpinned by the minimal supply of new retail space,” Mr Rooney said.
The smaller North Adelaide Village is near the redeveloped Adelaide Oval and can also sustain a mixed-use development of up to six storeys.
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