Sale of redeveloped St Collins Lane Melbourne secured by JLL
An institutional investor has acquired a 100 percent interest in the recently redeveloped St. Collins Lane CBD Shopping Centre.
The sale was negotiated by JLL’s Simon Rooney on behalf of LaSalle Asia Opportunity Fund III.
Located in the heart of Melbourne along the renowned Collins Street, St. Collins Lane offers over 9,000 sqm of GLA across four floors (plus a mezzanine level) comprising over 60 stores.
When offered to the market for sale, prior to St. Collins Lane being open, it had strong pre-commitment from a number of leading international brands including Coach, TAG Heuer, Reiss, Maje, Sandro Paris, Zadig & Voltaire and The Kooples.
A host of luxury Australian brands are also committed to the property, as well as popular restaurants including Burger Project and Los Vida – both a Melbourne first.
Debenhams recently announced they would be opening their first store in St. Collins Lane, further enhancing the strong tenancy mix.
St. Collins Lane sits below the Novotel Melbourne on Collins which sold for AUD 237 million to Frasers Hospitality Trust earlier in September, realising a total $484m for LaSalle.
JLL’s Head of Retail Investments – Australasia, Simon Rooney said the revitalisation of the CBD retail core has driven further strengthening of investor demand for these high quality assets and this was reflected in the competitive sale process for St. Collins Lane.
2016 already reflects a record year for CBD retail transactions with $1.6 billion recorded to date, eclipsing the $1.2 billion in 2015," he said.
Major CBD transactions – last 12 months
Property | Purchase price | Indicative yield | Sale date |
Carillon City, WA | $140,000,000 | 5.47% | October 2016 |
Myer Bourke Street Mall, VIC (33.3%) | $151,300,000 | 4.62% | August 2016 |
David Jones – 77 Market Street Sydney, NSW | $360,000,000 | 4.50% | August 2016 |
The Myer Centre Brisbane, QLD (25%) | $192,100,000 | 6.00% | May 2016 |
MidCity Centre, NSW (75%) | $320,000,000 | 4.77% | May 2016 |
World Square, NSW (50%) | $285,000,000 | 4.45% | December 2015 |
Rundle Place & 80 Grenfell St, SA | $400,000,000 | - | December 2015 |
“There is still very robust demand from investors who are seeking to acquire major CBD retail assets given their defensive nature and potential to generate solid income growth through increased population density, infrastructure improvements and employment growth.
Interest for St. Collins Lane was primarily led by offshore capital sources, with their lower cost of capital and strong preference for CBD retail assets. Although offshore investors have moved into other retail categories in recent years – primarily sub-regional retail – CBD assets remain the top preference for groups with a core strategy,” Mr Rooney said.