Adelaide’s only purpose-built outlet shopping centre has hit the market for the first time, following considerable interest in the capital city’s retail investment sector from both domestic and offshore investors.
Lewis Land Group has listed the Harbour Town Premium Outlets property, located on the western boundary of Adelaide Airport.
The open-air centre, which occupies a 97,500sqm land holding, was developed in 2004 and recently underwent a $12 million upgrade.
The 28,544 sqm Adelaide centre is home to 118 outlet stores and parking for 1,480 vehicles, including the largest Nike Unite and Tommy Hilfiger outlets in Australia.
“Transactions that make economic sense are always worth considering, and we will keep our stakeholders informed as we explore commercial options for the property,” Lewis Land Group CEO Matthew McCarron said.
“In the meantime, we will continue to focus on delivering exceptional outcomes for our customers across our extraordinary and unique quality portfolio of residential, retail and leisure assets.”
CBRE’s Pacific Head of Retail Capital Markets Simon Rooney has been appointed to manage the sale.
“Harbour Town Adelaide is one of just 17 outlet centres across the country, with only 11 major, comparable transactions having occurred in the past decade,” Rooney said.
“The sale provides an opportunity for investors to gain immediate scale in the highly sought after but rarely traded outlet shopping sub-sector, which benefits from greater trading resilience during downturns and continues to demonstrate outperformance given its discount-based offering.
“The attractive tenant profile is underpinned by strong trading specialty tenants, reporting outstanding specialty productivity of $10,014/sqm on highly sustainable rents, providing a platform for attractive rental growth.
“Outlet centres serve a much broader trade area than traditional retail centres and, in the case of Harbour Town Adelaide, the existing trade area population of 1.3 million residents as at June 2022, is forecast to grow by 1.1% per annum to reach 1.4 million residents by 2032. Over the same period, retail expenditure in the area is forecast to grow from $19.4 billion to $28.2 billion, representing annual growth of 3.8%.”
Rooney said there continued to be considerable interest in Adelaide’s retail investment sector from both domestic and offshore investors, who have acquired circa $990 million of retail assets in recent years.
This interest has been underpinned by Adelaide’s retail yield spread relative to Sydney and Melbourne and South Australia’s stamp duty exemption on commercial transactions, he said.