Investors bank on games saving retail
Property investors are banking on a renewed late-night economy in Sydney in the wake of big tech moving into the city.
Property investors are banking on a renewed late-night economy in Sydney, developing a wave of assets and pouring money into new developments as big tech moves in and around the centre of the city.
Property investment company Fortius Funds Management has doubled down on the idea, striking a partnership with Melbourne-based entertainment company Fortress to open one of the largest arcades in the southern hemisphere.
Together the pair have struck a deal for a 15-year lease, brokered by Colliers, which will see Fortress set up an interactive gaming and hospitality venue across 3000sq m of Fortius’s Central Park shopping mall, located by the University of Technology in Chippendale.
Under the deal, the Fortress would occupy a fifth of the retail area in Central Park and see the centre trade as late as 2am. Fortius chief executive Sam Sproats said the decision to operate into the wee hours would also support the endeavours of hospitality operators and the nearby outdoor bars and restaurants around the Kensington Street Precinct.
“We are incredibly excited to be partnering with such a dynamic next-generation business in Fortress, and this exciting deal underpins our vision to reimagine urban retail,” he said.
Mr Sproats said the new deal was just the beginning of investment in the area.
“We look forward to announcing further leasing deals with other adjacent operators in the next few months.”
Fortius purchased Central Park and two other assets from Frasers Property for $174m just over two years ago. The purchase makes up part of a vested interest in the southern end of the CBD, Mr Sproats said, adding that Sydneysiders could expect a wave of new retail around the area.
“We’ve got the opportunity where the first generation releases are coming to an end and with that comes opportunity,” he said.
“Our strategy for that asset is to do a remix and a reposition – you’ve always got to be reinventing yourself.”
The deal arrives as other investors are moving into the area, with Belingbak and Melbourne-based developer ICD announcing plans for a $450m hotel and unit project just 1km away on Pitt Street.
Fortress Sydney will cater for up to 1000 people with an all-inclusive 200-person themed restaurant and a bar.
The gaming facilities will include state-of-the-art computers, a board game library and a stage to host e-sport tournaments.
This style of interactive venue follows a wave of similar investment in immersive experiences such as “destination dining” which involves designing a restaurant to give the diner the impression they have been transported to another country.
While Sydney among other capital cities has seen a wave of immersive dining experiences and games-like retail including virtual reality stores opening in recent years, Fortress Sydney would be unlike anything else, said co-founder Jon Satterley.
“Fortress Sydney will be the jewel in our crown. It will be an awe-inspiring new home of games – the epitome of everything we have worked towards. The ultimate statement in live games culture entertainment.”
The gaming industry is expected to balloon out to $4.9bn by 2025, from a previous estimate of $3.4bn in 2020.
More Coverage
Double Bay site to hit new heights
The new luxury precinct will sport some of the country’s finest apartments, a boutique hotel and shopping.
Superannuation fund Aware strikes Brisbane office deal
Investment giant and superannuation fund Aware has bought into a major tower in Brisbane’s CBD from a venture run by heavyweight Dexus.