- The acquisitions represents a total transaction of almost $759M
- This is the largest direct retail transaction in Australia this year
- CBRE says this signals a positive turnaround in institutional investor sentiment
AMP has announced its Shopping Centre Fund (ASCF) and Retail Trust (ACRT) has acquired significant interests in two shopping centres for a combined total of $758.9 million – making it the largest direct retail estate transaction in Australia for 2021.
A quarter of Sydney’s Macquarie Centre was acquired by the ASCF with the ACRT acquiring the remaining 20% of Pacific Fair.
The announcements follow the ACRT fund’s recapitalisation for $2.2 billion along with the sale of a 25% interest in Warringah Mall to Dexus from the ASCF for $410 million.
These transactions represent $3.4 billion in property changing hands, and consolidates the retail ownership between AMP Capital, Shopping Centre Fund, UniSuper, Cbus Property and AMP Capital.
Simon Rooney, CBRE’s Head of Retail Capital Markets, said the campaign for Pacific Fair and Macquarie Centre garnered significant interest from Australian retail owner-managers, institutional finds and heavyweight offshore investors.
He added this provided the first opportunity since the beginning of the pandemic for investors to buy into the super regional Australian shopping centre space.
“This transaction will instill further confidence in the retail market’s underlying fundamentals given the relative value on offer and will help propel further activity in the new year given the enhanced investor demand for core retail assets,” said Mr Rooney.
“The positive turnaround in institutional investor sentiment and capital reallocation back to retail is in its early stages but is clearly evident and is centred on assets which are considered the “best of the best – criteria clearly met by Pacific Fair and Macquarie Centre.
Simon Rooney, CBRE
“We have seen a material rebasing in retail asset values over the past 12 to 18 months, together with a ‘mark to market’ rental reset.
“This, combined with monthly sales and traffic growth and the historically attractive retail yields on offer, is clearly compelling – presenting a real window of opportunity for major domestic and offshore investors.”
Record year for AMP
The Macquarie Centre stake was sold for $422.5 million at a capitalisation rate of 4.50%, with Pacific Fair sold for $336.4 million at a rate of 4.75%.
Pacific Fair is the fifth largest shopping centre nationally, with a gross lettable area of around 150,000sqm. Its Moving Annual Turnover (MAT) is over $890 million, placing it in the top 10 nationally.
The 135,000sqm Macquarie Centre is located near the Macquarie Metro Station and Macquarie University which is in the heart of Macquarie Park, which is Australia’s largest non-CBD office market.
Kylie O’Connor, AMP Capital Global Head of Real Estate, said the deals wrap up a record year.
“We are continuing to deliver for our investors with investments in premium real estate assets,” said Ms O’Connor.
“With these latest acquisitions in Pacific Fair and Macquarie Centre, AMP Capital’s investors will hold stakes in 14 of the most highly regarded shopping centres in Australia and New Zealand.”
