ISPT lists Midtown Melbourne shopping mall for $165m
Industry super fund investor ISPT is offloading shopping mall Midtown Melbourne in the CBD – taking advantage of the city’s revitalised retail sector since the COVID-19 pandemic – with what market sources said were $165 million price hopes.
The nine-storey building at 246 Bourke Street has 15,000 square metres of net lettable area and four retail floors, with tenants including HSBC Bank, Chemist Warehouse, Daiso and W Cosmetics, with a fully leased net income of about $13 million.
Japanese retailer Muji has signed a 10-year lease from 2027 to establish a three-storey superstore in the shopping centre, which has street frontage across Swanston, Bourke and Little Bourke streets. Offices occupy the building’s upper levels.
Cushman and Wakefield agent Oliver Hay – who is marketing the building with colleagues Daniel Wolman, Trent Weir and Leon Ma – said retail had bounced back stronger than pre-COVID levels in Melbourne, with growing demand from domestic and international capital.
“If you look at the Bourke Street Mall and the vacancy rate in that civic centre, it’s dropped to less than 4 per cent, which is as low as retail has ever been in that precinct,” Hay told The Australian Financial Review.
“You look at the evolution of the Bourke Street Mall with Mecca, the Indigo hotel. That strip has been absolutely transformed and this is a gateway to that. You’re underpinned by a very strong, secure and diverse income stream.”
This follows a string of shopping centre sales by ISPT – which became a subsidiary of global institutional investor and asset manager IFM Investors at the end of last year – since it recorded heavy declines across its funds combined to deliver a $1.5 billion loss last year.
One of its recent sales was a shopping centre in the Blue Mountains to Sydney-based asset manager Precept Property Partners for $34.8 million in July. It first purchased a 75 per cent stake in the Katoomba Village shopping centre in Katoomba for $24 million and later acquired the remaining 25 per cent for $8.65 million.
Another was the six-level retail complex at 206 Bourke Street, near Bourke Street Mall, which it sold for $80.1 million – more than 30 per cent less than the $118 million it paid for the asset in late 2015.
ISPT declined to comment.
