Investors have roared back to the mall market, snatching $ 4.52 billion worth in anticipation that the pandemic sector will rise again and yield high returns.
Asset sales have defied the impact of the global pandemic, which forced most non-food renters to close for many months. As the restrictions are eased, investors are rushing to gain a foothold in brick and mortar.
CBRE’s head of retail capital markets, Pacific, Simon Rooney, who sold half a stake in the Southwest Roselands Mall to Sydney’s acquired Hong Kong-based JY Group for $ 167 million, said retail was the right engine at the moment, with . at least another $ 2 billion in assets expected to change hands this year.
“The comparative returns and value proposition are clearly convincing how large owners are now able to competitively rebalance portfolios so that incoming investors can strategically acquire some of Australia’s best retail assets,” said Rooney.
He added the return of institutional capital to the sector, combined with strong demand from private investors, would lead to increased transaction activity by 2022. He said almost $ 4.52 billion had flowed into Australian retail investment in the last six months, an increase at 118 percent.
This cash has already rolled into what is the largest direct real estate business in Australia to date and the largest deal globally in the last three years with UniSuper and Cbus Property, which have acquired a 80 per cent and 50 per cent stake in regional shopping centers, Pacific Fair on the Gold Coast and Macquarie Center in Sydney.
The assets came from an AMP-managed fund with a book value of $ 2.2 billion. At a weighted average capital value of 4.66 percent.
Under the agreement, the assets will be owned in the AMP Capital Retail Trust, in which UniSuper and Cbus Property will have a majority, as AMP Capital owns the balance sheet. AMP Capital will maintain management rights for the assets and look at conversions, including a mixed-use scheme at the Macquarie Center.
Sholto Maconochie, of Jefferies, said he expects retail values to stay at the December 2021 level for regional malls.