Vicinity Buying Out 75% Stake in Central Brisbane Shopping Centre for $150M

Australia’s Vicinity Centres will pay A$212 million ($149.5 million) to acquire the remaining 75 percent stake in a Brisbane retail block from co-owner IFM Investors.

Vicinity has owned 25 percent of Uptown since 1998 and manages the property, formerly known as Myer Centre. Uptown sits on the Queen Street pedestrian mall in Brisbane’s central business district and provides 63,025 square metres (678,395 square feet) of gross lettable area. 

Plans call for redeveloping Uptown into a retail, dining and entertainment facility in the same vein as Emporium Melbourne in Vicinity’s hometown, the company said this week in a release. 

“Securing full ownership will enable Vicinity to leverage its core competencies across development execution, and project leasing, and accelerate the revitalisation of Uptown and importantly, unlock the latent value of this asset,” said the group led by CEO Peter Huddle.

A$350M Project Planned

The 1988-built shopping centre is anchored by Target, Coles and Event Cinemas and includes more than 100 specialty stores, according to a fact sheet. Uptown also serves as a transport hub with on-site carparks and access to the Queen Street Mall bus station within the centre.

With the redevelopment of Uptown, Vicinity aims to fill a need in Brisbane’s CBD for a large-scale, full-price retail offering. The company plans to expedite the project at an anticipated cost of A$300 million to A$350 million.

“By virtue of its existing and forecast total trade area as well as the major state-led infrastructure projects intended to enhance the connectivity of Brisbane’s CBD in advance of the 2032 Olympic Games, Uptown has inherently strong growth potential,” Vicinity said.

Contracts are expected to be exchanged by the end of April, with the acquisition from IFM’s ISPT Core Fund expected to close in June, following receipt of the required ministerial consent in relation to certain ancillary land rights.

Retail Renaissance

Australian malls and shopping centres have traded briskly in recent days, with Charter Hall this week announcing its acquisition of a three-asset portfolio of convenience-based sub-regional centres from LaSalle Investment Management for A$360 million.

Last month, a joint venture of a Lendlease-managed private fund and South Korea’s National Pension Service completed the sale of the Erina Fair mall in New South Wales to Fawkner Property for A$895 million.

In December, Dexus Group launched a new fund seeded with a quarter-stake in Brisbane’s Westfield Chermside, the country’s second-largest regional shopping centre by both sales and gross lettable area, to be acquired for A$683 million.

The Dexus deal followed closely on fund manager Charter Hall’s A$210 million purchase of Burwood One in Melbourne’s eastern suburbs and the firm’s A$152.5 million buy of Southport Park in Queensland’s Southport.

In November, MA Financial revealed its acquisition of a regional mall in the suburbs southeast of Brisbane from Queensland Investment Corporation for A$678.7 million. The transaction for the Hyperdome Town Centre complex in Loganholme — the largest-ever sale of a 100 percent interest in a Queensland regional shopping centre — built on MA’s A$393.8 million buy from Blackstone of Top Ryde City Shopping Centre in Sydney alongside Singapore’s Keppel REIT.

In June, QIC announced its divestment of a Melbourne mall, Woodgrove Shopping Centre, to US-based PGIM Real Estate and Australia’s Assembly Funds Management in a A$440 million deal following a 28-year carry by the state-backed player.