$170m Central Park retail jewel up for grabs

$170m Central Park retail jewel up for grabs

26 April 2019

Developers Frasers Property Australia and Japan’s Sekisui House are hoping to defy gloom in the retail property market by selling the retail component of their $2 billion mixed-use Central Park project in Sydney, The Australian reports.

The three sites—the Central Park Mall, DUO Retail, and Park Lane Retail—will be offered as one line, valued at about $170 million.

Built in stages and opened in 2013, the former Carlton and United brewery site has been transformed into a mixed-use precinct with retail, commercial, hotel, education, student accommodation and residential uses integrated with entertainment and lifestyle offerings.

Best known for its vertical gardens and heliostat, the complex is unrecognisable from its past as a brewery site. And now that the 12-year project is nearly complete, the joint venture partners want to sell the remaining three retail assets in one line.

The highly-prized offering is expected to draw a new breed of buyers who are chasing leisure-based assets rather than traditional centres, which are suffering as department store sales flag.

While some retail centres are falling in value, the best city retail assets are still rising in value on the back of their performance.

Asian groups familiar with the Frasers operation are reportedly already keen on the property.

Development director for Frasers Property Australia, Mick Caddey, said the retail assets served a large and growing catchment from a prominent and easily accessible location, with more than 115,000 students within walking distance of the centre.

“Neighbouring Central Station is less than a 500-metre walk and is Australia’s largest and most frequented railway station. Central Station is currently undergoing a $955 million upgrade, with an estimated 270,000 commuters passing through the station daily,” Mr Caddey said.

There will also be future demand from more office workers, with internet giant Google potentially looking to establish a 90,000-strong campus at adjoining Central Station when office towers are vacated and redeveloped.

The shops will benefit from a planned technology precinct nearby, led by a commitment from software giant Atlassian.

Recent sales of Sydney CBD retail assets highlight strong investor demand for the still tightly held assets class, with a one quarter interest in MidCity Centre selling at a yield of about 4 per cent and Pitt Street’s Soul Pattinson Building selling for $95m at 4 per cent.