Rich Lister Con Makris has divested two shopping centres in Adelaide for a combined value of $110 million, winding back further his retail real estate footprint in the inner-city.
Sydney property group Revelop has acquired the landmark City Cross Shopping Centre in Adelaide’s Rundle Mall for $60 million. That transaction was struck on a passing yield of around 6.25 per cent.
The City Cross Shopping Centre transaction is the latest deal between the Makris Group and Revelop.
Meanwhile, investment firm Greenpool Capital, with backing from Qualitas, has bought North Adelaide Village, some three kilometres from the CBD, along with an adjoining site at 85-87 O’Connell Street in a deal valued at $50 million.
That transaction was struck on a 6.75 per cent passing yield.
Mr Makris put the two malls on the market in July last year, appointing CBRE’s Simon Rooney and James Douglas to broker the retail properties.
The City Cross Shopping Centre transaction is the latest deal between the Makris Group and Revelop, after the Sydney platform bought Newton Village Shopping Centre in Adelaide’s north-west for $35 million two years ago.
The acquisition adds to Revelop’s two other South Australian retail investments, Renmark Square and Gawler Park Homemaker Centre.
The City Cross mall fronts Rundle Mall, the city’s retail core as well as Grenfell Street, host to business and government tenants.
“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,” Mr Rooney said.
“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.”
City centre retail assets have been among the hardest hit during the pandemic disruption.
Valuations released last month by ASX-listed Vicinity Centres showed its CBD assets were written down the most.
Last year, JP Morgan Asset Management sold St Collins Lane mall in the Melbourne for $125 million, around half the price it had paid four years earlier.
But there is also a longer-term confidence for the resilience of prize CBD assets, underlined by Charter Hall’s blockbuster $510 million acquisition of David Jones’ flagship Elizabeth Street, on one of central Sydney’s best corners, just before Christmas. That deal was struck on a sharp 5 per cent yield.
Mr Makris arrived in Adelaide as a teenager in 1964 from Greece before building up a vast property development and shopping centre empire after starting off with a chicken shop.
He stepped back from the day-to-day operations of the Makris Group several years ago and put in place an independent advisory board to guide expansion, which has been focused on Queensland.