CBD retail transaction volumes reach a new record for the Australian market
DEXUS Property Group has acquired one of Perth’s largest CBD assets from Brookfield and Hawaiian Investments. The high profile and strategically located Carillon City shopping and office complex was purchased for AU$140 million, bringing year-to-date CBD retail transactions to AU$1.5 billion, a new record high for the Australian market.
Carillon City is a major city shopping and office complex located in the Perth CBD, housing one of the city’s most established high traffic city shopping centres comprising 10,700 square metres of retail space across four floors.
The acquisition marks the Fund’s first retail investment in Western Australian and, according to DWPF Fund Manager, Michael Sheffield, represents a value add opportunity that provides exposure to the tightly held Perth city retail market.
“The asset fits well with DWPF’s strategy and enhances the retail portfolio by diversifying across a range of shopping centre types and markets,’ he explains.
This acquisition builds on DWPF’s demonstrated ability to execute on its Australia strategy in recent years through the successful acquisitions of Shepparton Marketplace in December 2014, Sturt Mall, Wagga Wagga and Deepwater Plaza, Woy Woy in July 2014 and Beenleigh Marketplace in December 2013.
According to JLL’s Simon Rooney, who brokered the deal, CBD shopping centre transactions have dominated the Australian retail investment market in 2016.
‘Investors are clearly responding to the trend towards high density inner-city living, and what that means for the outlook for CBD retail performance,’ he explains.
“We’re seeing much greater levels of high quality retail space available in CBD markets around the country, not just with international high street flagship stores and major shopping centre redevelopments, but also mixed-use assets.”
The sale of Carillon City adds to a series of CBD retail asset transactions that have occurred over the past 18 months.
“The Perth CBD is primed for a resurgence through the construction of new apartments, hotels and infrastructure and urban renewal projects. This will drive demand for quality retail amenity in the CBD and lead to strong leasing market activity,” says Mr Rooney.
According to research from JLL, new international retailers are likely to seek space within the Perth CBD as they progress with expanding their store network throughout Australia. In addition to Zara and Topshop, H&M and Uniqlo have committed to new stores in the Perth CBD and other international brands are likely to follow suit.