Makris Group divests $110m retail portfolio in Adelaide

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City Cross Shopping Centre sells for $60m

Makris Group has realised a $110 million portfolio transaction comprising two major Adelaide assets in a sign of ongoing demand for strategically located retail properties with future value-add potential.

Sydney property group Revelop has acquired the landmark City Cross Shopping Centre in Adelaide’s Rundle Mall for $60 million, while investment firm Greenpool Capital, with backing from Qualitas, has snared North Adelaide Village and an adjoining site at 85-87 O’Connell Street in a deal valued at $50 million.

CBRE’s Simon Rooney together with James Douglas negotiated both sales on behalf of the Makris Group, South Australia’s largest privately-owned retail property group, founded by Con Makris in the 1980s.

Rooney said the City Cross Shopping Centre transaction, struck on a passing yield of around 6.25%, demonstrated the strong buyer appetite for CBD retail assets with significant upside.

“The long-term fundamentals for CBD retail remain strong, underpinned by key demand drivers such as significant residential development / construction, robust population growth, strong white-collar employment and both domestic and international tourism – which is expected to rebound post COVID-19,” Rooney said.

“In the case of City Cross, the sale provided an opportunity to acquire a major CBD retail holding offering multiple mixed-use development opportunities. This future flexibility was a major drawcard for Revelop, as was the centre’s strategic Rundle Mall location, which attracts 24 million pedestrian visitors annually”, he said.

The City Cross Shopping Centre transaction represents the latest deal between the Makris Group and Revelop, after the Sydney group’s 2019 acquisition of the Newton Village Shopping Centre in Adelaide’s north-western suburbs for $35 million, adding to Revelop’s two other South Australian retail investments – Renmark Square and Gawler Park Homemaker Centre.

City Cross Shopping Centre offers extensive frontages to Rundle Mall – the retail heart of the Adelaide CBD – and Grenfell Street, the city’s core commercial address for corporate and Government tenants.

The 10,512m2 centre includes anchor tenants Harvey Norman, Rebel Sport and Australia Post, alongside 56 specialty tenancies, including a highly productive food offering.

The existing centre services an expansive metropolitan trade area population of over 1 million, a worker population of 117,600 and a domestic and international visitor market of over 8 million per annum, prior to COVID-19. The major trade area retail expenditure pool is approximately $15.1 billion, including $7.9 billion in the primary trade area, forecast to reach $27.7 billion by 2036.

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