AMP Capital has taken over the Macquarie Centre in New South Wales, while partnering with UniSuper and Cbus Property to take control of Pacific Fair in Queensland in deals totalling $758.9 million.
The Dexus Wholesale Property Fund sold both stakes at their book value as at 30 June 2021, marking Australia’s largest direct retail transaction for 2021.
The AMP Capital Shopping Centre Fund (ASCF) has acquired an additional 25 per cent stake in Macquarie Centre for $422.5 million, resulting in ASCF and the AMP Capital Retail Trust (ACRT) each holding 50 per cent of the shopping centre.
In a second transaction, AMP Capital, UniSuper and Cbus Property purchased the remaining 20% of Pacific Fair for $336.4 million through ACRT, resulting in the fund wholly owning the asset.
The Pacific Fair stake sale represented a capitalisation rate of 4.75%, while the Macquarie Centre interest sold at a capitalisation rate of 4.5%.
“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,” said AMP Capital Global Head of Real Estate Kylie O’Connor.
“The latest acquisitions cap off a record year of more than $3.6 billion in retail transactions, as well as the introduction of two new parties into ACRT in Cbus Property and UniSuper, which reflects the sector-leading expertise of AMP Capital’s highly regarded real estate team and the continuing strength of our platform.”
“The further investment into Pacific Fair with UniSuper and AMP Capital reinforces our conviction in the underlying performance of the centre, the potential for future growth and the alignment with our new partners,” said Cbus Property’s CEO Adrian Pozzo.
UniSuper’s Head of Property and Infrastructure Kent Robbins said securing total ownership of Pacific Fair alongside their partners would provide an increased exposure to the benefits of the reopening of economies as travel restrictions ease.
“Over the longer term, we look forward to investing into growth opportunities that arise from this iconic centre alongside our aligned partners,” said Robbins.
It was the largest retail transaction in Australian history, as well as one of the largest global retail transactions since 2018.
The seller mandated CBRE’s Head of Retail Capital Markets Simon Rooney, together with JLL, to steer the sale campaigns.
“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,” Rooney said.
“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.”
Investors have been on a retail property shopping spree in recent months, including Link REIT’s acquisition of a 50% stake in three retail properties in Sydney for $538.2 million.
Other deals include Vicinity Centres’ purchase of a 50% stake in the Gold Coast’s Harbour Town outlet centre from a Lendlease-managed fund for $358 million and CIP Asset Management’s sale a 50% stake in the Roselands shopping centre in Sydney for $167 million.
Last month, Greenpool Capital and Qualitas took over the Gold Coast’s Runaway Bay Centre after buying the remaining 50% interest from Vicinity Centres for $132 million, while a new Bunnings store under construction in Queensland’s Hervey Bay sold for $58.6 million last month.