Challenger secures Italian pizza tenant Konopizza for refurbished Jam Factory

Italian-based pizza operator Konopizza will open its first Australian outlet in the newly revamped Jam Factory in Melbourne.

The pizza chain, famous for its cone shaped pizzas, will rent a 60 square metre shop in the iconic entertainment centre on Chappell Street in South Yarra.

The rent Konopizza will pay was not disclosed.

Average passing rents in the centre are $553 per square metre.

The Jam Factory is the retail jewel in the crown of Challenger Diversified Property Trust.

Last week the trust reported a 10.6% lift in interim net profits to $20.8 million on the back of the strong performance of the recently refurbished cinema and retail complex.

Challenger spent $20 million refurbishing the Jam Factory and secured a new 12 year lease with Village cinemas, with the centre returning an income yield on refurbishment costs of 8.8%.

The other noteworthy tenant is UK fashion retailer TopShop, which has a 10 year lease over 1,600 square metres in the complex and occupies the prominent corner site once leased by Borders bookstore.

The trust fund manager Trevor Hardie said higher rents at the Jam Factory had boosted the first-half results.

The lease to Konopizza was negotiated by the CBRE Retail Services team of Max Cookes and Zelman Ainsworth.

CBRE is the exclusive retail leasing agent for the centre.

“Topshop selecting the Jam Factory to be their first retail location certainly illustrated the strength of the centre and the prime nature of this retail location within South Yarra,” says Cookes.

“Over the last 18 months our team has worked closely with the Challenger to achieve their desired results on the retail component of the asset which has been repositioned as a destination shopping precinct that has attracted not just Topshop but a number of other major international and national hospitality, entertainment and fashion retailers.”

Other food retailers in the centre include Nashi, Salsas, Nandos, Shuji Sushi, Boost Juice and Romanos café.

Village Cinemas has been the anchor tenant at the Jam Factory since 1995.

Challenger acquired its 60% interest in the Jam Factory in October 2006.

The Jam Factory was first established in 1858 as the Victoria Brewery.

In 1876 the Victoria Brewery closed down. The building and land were then sold for 5,350 pounds to Robert Wright and Robert Payne. No longer a Brewery, the new company was named the Victoria Preserving Company.

In 1895, Mr William Peacock bought the premises and turned it into the ‘OK’ Jam Co.

It is currently valued at $77.4 million.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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