Mall deal sealed in Melbourne CBD despite lockdown
St Collins Lane has sold to Melbourne property fund manager Vantage and Credit Suisse.

Mall deal sealed in Melbourne CBD despite lockdown

JP Morgan Asset Management has offloaded the struggling St Collins Lane mall in the Melbourne CBD to joint venture partners Credit Suisse Asset Management and Vantage Property in a deal understood to be worth around $125 million.

As first reported by The Australian Financial Review, Melbourne fund manager Vantage had been undertaking due diligence since July to acquire the 9000sq m mall, with contracts exchanging last week.

The sale is understood to be a repositioning play for the new owners, who were able to purchase the property for about half the $247 million JP Morgan Asset Management paid for the luxury mall when it bought it from LaSalle Investment Management in 2016 on a yield of about 5 per cent.

With a discount in pricing, Vantage and Credit Suisse will be able to invest significant capital into the underutilised asset, as well as possibly discounting rents, with plans to relaunch the mall next year.

JP Morgan has also previously attempted to revitalise the mall with new tenancies, including a Leica camera shop and gallery, but failed to turn it around, with the upper floors sprinkled with empty shops.

JP Morgan and Vantage declined to comment. CBRE’s Simon Rooney, who negotiated the deal, could not be reached before publication.

The sale comes off the back of another significant retail property deal in the centre of Melbourne’s CBD, and flies in the face of the city’s tough restrictions that saw Melbourne in lockdown since March and the property market largely go into hibernation.

In July, Melbourne fund manager Newmark Capital sealed its $121 million acquisition of the six-storey historic David Jones menswear store on Bourke Street Mall with plans to refurbish not just the retail levels but also the office floors above, which had been used by the retailer to store stock and for staff amenities.

The deal reflected a 20 per cent discount to the $150 million pre-pandemic price expectations when David Jones owner, Johannesburg-listed Woolworths Holdings, put the property on the market in November.

Plans to sell the other Melbourne CBD David Jones store, which was being offloaded by South African-based owner Woolworths Holdings Limited for between $200 million and $300 million, together with the newly-refurbished Elizabeth Street store in Sydney, is understood to have been put on ice with until next year, while the store remains closed.

Also on the market in the Melbourne CBD is the Louis Vuitton building – a Renaissance-style building built in the 1880s at the “Paris end” of Collins Street.

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