The $3b splurge in malls, office towers, childcare centres Credit Larry Schlesinger
Some $3.2 billion worth of malls, office towers, healthcare assets, childcare centres and major development sites changed hands in the final two weeks of 2021, to end a record-breaking year for Australia’s resurgent commercial property market.
Once all the figures have been tallied, more than $43.5 billion of assets will have transacted in 2021, according to calculations by The Australian Financial Review – after JLL tallied $40.5 billion of deals to mid-December (compared with $20.3 billion of investment activity for the full year in 2020) led by the high-flying industrial property sector.
The final two weeks of the year provided further evidence of the improved investor sentiment towards large retail assets as more than $1 billion of deals were completed to add to a record $11 billion of sales from January to mid-December, according to JLL.
End-of-year deals included the Fu family’s YFG Shopping Centres buying Brisbane’s Strathpine Centre for $267 million from US private equity giant Blackstone on a sub 6 per cent yield, and AMP Capital taking complete control of two destination malls, Pacific Fair on the Gold Coast and the Macquarie Centre in suburban Sydney for a combined $760 million on yield of about 4.75 per cent.
Also getting back into malls was super fund investor ISPT, which took a $330 million stake in a convenience shopping centre fund run by listed wealth manager E&P Financial.
Adding to these deals, the Singapore-listed CapitaLand Integrated Commercial Trust secured its third Australian investment just before Christmas, buying a half-stake in a 28-storey North Sydney office tower at 101 Miller Street and the integrated Greenwood Plaza mall beneath it from US asset manager Nuveen for $422 million on a passing yield of 5.6 per cent. The other half of the property is owned by Mirvac.
The Singaporean trust will lift its exposure to Sydney’s commercial property market to $1.1 billion in early 2022, when it settles the acquisitions of 66 Goulburn Street and 100 Arthur Street – two A-grade office towers – in a related- party transaction.
Heading into the Christmas weekend, listed fund manager Centuria bulked up its exposure to another high-flying real estate sector – healthcare – after revealing $466 million of acquisitions.
Centuria journeyed across the Tasman to buy a portfolio of 38 aged care properties for $276 million for its Australian and New Zealand unlisted healthcare funds in a 30-year sale-and-leaseback deal with private equity firm Adamantem Capital and its healthcare business Heritage Lifecare.
Centuria also bought the Varsity Lakes Day Hospital on the Gold Coast for $75.7 million and paid $38 million for a site in Alexandria in inner Sydney’s eastern suburb earmarked for the development of a “significant healthcare property”.
Joining the end-of-year action, the ASX-listed Charter Hall Social Infrastructure REIT increased its portfolio to almost $2 billion after acquiring 21 childcare centres in Western Australia and Victoria for a combined $134.3 million.
Its manager, meantime, ASX-listed Charter Hall Group diversified its $61 billion real estate platform after paying $207 million for a 50 per cent stake in Paradice Investment Management, an Australian and global listed equities investment firm founded by veteran Australian stock picker David Paradice.