US-based private equity company Blackstone has made its first major acquisition in South Australia, securing Rundle Place in the Adelaide CBD for $400 million.
Rundle Place is a new retail and office development on the site of the old Harris Scarfe department store on Grenfell Street. It was developed by Melbourne-based vendor epc.Pacific in 2013.
The retail component has an area of 22,000 sqm, and includes more than 85 shops. The 11-storey office tower at 80 Grenfell Street has a net lettable area of 23,500 sqm and is leased to Bendigo and Adelaide Bank.
Initial yield is understood to be about 6.5 per cent.
The deal was negotiated by Simon Rooney and Rob Sewell of JLL.
Blackstone has purchased several retail assets in Australia, most recently three centres in Queensland and NSW from Scentre Group in August 2015 for more than $650 million.
Commenting on the deal, Property Council SA executive director Daniel Gannon said the Rundle Place sale was an encouraging sign for the state’s economy.
“At a time when our state’s jobs market is struggling, this is the type of foreign investment narrative Adelaide needs right now,” he said.
“We shouldn’t forget that South Australia is in an investment competition with the rest of the country and globally when it comes to attracting foreign investors, and when combined with commercial stamp duty abolition, our state’s investment appeal is heading in the right direction.”
Source: News Release, Property Council of Australia, 19 January 2016