RICH-LISTERS, local supermarket groups and some of the state’s wealthiest families have built their fortunes by investing in suburban and regional shopping centres across the state, but interstate investors are making their move on the lucrative retail property market.
Analysis undertaken by The Advertiser and property group JLL reveals the eclectic mix of shopping centre landlords emerging from COVID-19.
While the state’s largest centres, such as Westfield Marion, TTP and Colonnades, are owned by corporate groups, close to three quarters of the more than 100 subregional and neighbourhood centres analysed are owned by local family interests.
A subregional shopping centre is generally defined as a centre with at least one discount department store as its major tenant, while a neighbourhood centre is typically a smaller complex with a supermarket as its anchor tenant.
JLL state managing director Ben Parkinson said the state’s shopping centres were typically “tightly held” by local investors, but interstate and offshore groups were increasingly looking for opportunities to invest.
“The South Australian retail ownership profile is dominated by private owners and syndicates, particularly at the neighbourhood centre end of the market,” he said yesterday.
“Recently we have seen more sophisticated investors like ISPT, Charter Hall and HomeCo show interest in the sector, and we are seeing unprecedented demand for supermarket anchored shopping centres and freestanding investments like Bunnings. The weight of capital is coming from privates, syndicates, listed and unlisted funds, together with local managers investing for offshore groups.”
Interstate groups that have invested in SA’s retail property market in recent years include western Sydney’s Revelop, which has snapped up four local centres since 2017, including Renmark Square and Newton Village.
Singapore’s SPT REIT is the only foreign investor in major SA centres, paying $670m for a 50 per cent stake in Westfield Marion in 2019.
Nick DiMauro, who was ranked the state’s third-wealthiest person in last month’s Richest 250 list, controls six centres, including Parabanks and Sefton Plaza. He said the abolition of stamp duty on commercial property sales in SA had attracted a wave of investment from interstate groups.
“To me South Australia is a great place to invest, especially now with no stamp duty – that’s the game changer for me and I think the eastern states now have caught on,” Mr DiMauro said. “I think that’s the key component – we’ve had a quiet 12 months because of COVID, but once this is over things are going to start to move a bit more.”
Harry Perks, another prominent investor in retail property, said supporting tenants during the pandemic had been his top priority over the past year. “What we did when COVID first hit was look at every tenant we’ve got in our properties and we gave them rent relief where it was needed,” he said.
“Across our centres we gave something like $4m worth of rent relief and none of this was accrued because we didn’t believe tenants, when they get through their problems, want to be paying more rent than they were.”
To me South Australia is a great place to invest, especially now with no stamp duty
Nick DiMauro