Cromwell walks away from Blackstone's Rundle Place sale
Adelaide’s Rundle Place still has a way to go before it gets a new owner, after ASX-listed property group Cromwell pulled out of the running to buy the asset from private equity giant Blackstone.
Cromwell has joined AMP Capital to pass on the $250 million deal after coming out of due diligence recently, it is understood.
Both Blackstone and Cromwell declined to comment on Thursday.
AMP Capital said no to the purchase in June before Cromwell started taking a look at the deal in July with Blackstone unwavering in its plans to sell the mall and office property.
Blackstone bought Rundle Place and the office tower at 80 Grenfell Street in a package worth $400 million in early 2016. Then it was Adelaide’s newest mall and the deal was the city’s biggest individual property transaction.
The Rundle Place high-end retail shopping centre is located on the site of an old Harris Scarfe department store and has more than 85 shops over 22,000 square metres. The centre’s 11-storey office tower sits above it.
The slow retail asset selling environment however hasn’t deterred Blackstone from putting up more assets for sale.
The firm has quietly enlisted JLL’s retail specialists Sam Hatcher and Jacob Swan as well as consultants Stonebridge Property Group to sell two of its regional retail assets, Warrawong Plaza, formerly Westfield Warrawong, and Toowoomba’s Clifford Gardens Shopping Centre.
A price guide for the on-market campaign hasn’t been formalised.
Blackstone snapped up Warrawong together with two more Westfield properties – Figtree, also in the Wollongong, and Strathpine in Queensland – from Scentre Group in 2015.
Warrawong opened in 1960 as Lake Market Shopping Centre before being acquired by Westfield in 1985. It has about 57,000sq m of retail space.
Warrawong was one of the 11 centres Blackstone took to the market for $3 billion in 2017 before calling off the sale amid poor market sentiment.
Blackstone bought Clifford Gardens Shopping Centre from Vicinity Centres in 2016, as part of Vicinity’s asset divestment program.
While Blackstone and other asset owners may be reeling from weak retail asset trading in a market flushed with properties for sale due to retail trading headwinds, there is one piece of good news for Blackstone.
The group has closed the sale of the Brimbank Shopping Centre north-west of the Melbourne CBD to Mulpha for about $160 million, after a successful due diligence, as previously foreshadowed by The Australian Financial Review.
