Lewis Land selling Harbour Town Adelaide in major shake-up of retail portfolio as buyers line up

Lewis Land Group has placed its flagship South Australian retail centre, Harbour Town Premium Outlets in Adelaide, on the market in a major shake-up of its commercial property portfolio after fielding enquiries from prospective buyers.

The Sydney-based private company, which established the Harbour Town concept on the Gold Coast in 1999, reveals that the sale aims to take advantage of increased valuations for its portfolio after ‘exploring commercial options’ for the property.

“The possible sale of Harbour Town Premium Outlets is consistent with the group's long-term strategic objectives, which include maximising the value of its portfolio and delivering long-term and sustained increases in shareholder value,” says the company.

“This decision follows significant appreciation in the value of the group’s retail assets and will allow for a rebalancing of the group’s portfolio.  It reflects the group’s policy of continuously reviewing its assets to ensure they are optimised for the long-term, including providing opportunities for ongoing growth and development.”

Adelaide Harbour Town, located next to the city’s airport, underwent a $35 million upgrade in 2018 and this was followed more recently by an additional $12 million refurbishment.

While the company has previously described Adelaide Harbour Town as a ‘core asset’, the planned sale is consistent with the sale in 2021 of a 50 per cent stake in Gold Coast Harbour Town for $358 million to Vicinity Centres (ASX: VCX).

“As a leading Australian property developer and owner, our portfolio of assets is always evolving,” says Lewis Land Group CEO Matthew McCarron.

“Our priority as a family-owned business is to continuously explore opportunities for growth over the long-term.

“Given the quality of our assets, we often receive enquiries from prospective purchasers. Harbour Town Adelaide is no exception, and we can confirm the centre, which is Adelaide’s only purpose-built outlet, is being offered for sale. Transactions that make economic sense are always worth considering.”

Lewis Land has appointed CBRE to sell the property which occupies 9.75ha on the western boundary of Adelaide Airport.

Adelaide Harbour Town was developed by the company in 2004 and currently has 28,544sqm of retail space and 118 outlet stores, including the largest Nike Unite and Tommy Hilfiger outlets in Australia.

“Harbour Town Adelaide is one of just 17 outlet centres across the country, with only 11 major, comparable transactions having occurred in the past decade,” CBRE’s Pacific head of retail capital markets Simon Rooney says.

“The sale provides an opportunity for investors to gain immediate scale in the highly sought after but rarely traded outlet shopping sub-sector, which benefits from greater trading resilience during downturns and continues to demonstrate outperformance given its discount-based offering.

“Harbour Town represents a rare opportunity to buy into a high-performing outlet retail centre with exciting future growth prospects.”

Rooney says as a retail outlet centre, Harbour Town has a broader catchment than traditional retail centres and that Adelaide’s population growth underpins its future potential.

“In the case of Harbour Town Adelaide, the existing trade area population of 1.3 million residents as at June 2022 is forecast to grow by 1.1 per cent per annum to reach 1.4 million residents by 2032,” he says.

“Over the same period, retail expenditure in the area is forecast to grow from $19.4 billion to $28.2 billion, representing annual growth of 3.8 per cent.”

Rooney notes that Adelaide retail investments have been in the sights of domestic and offshore investors for some time, with sales of about $990 million of retail assets in recent years.

“This interest has been underpinned by Adelaide’s retail yield spread relative to Sydney and Melbourne and South Australia’s stamp duty exemption on commercial transactions,” he says.

Lewis Land Group has just three shopping centres in its portfolio, including Sovereign Place Town Centre at Port Macquarie, with the company largely invested in residential developments and hotel assets.

The company retains extensive interests on the Gold Coast where it developed The Sovereign Islands, the luxury waterfront residential enclave at Paradise Point which is home to some of the city’s most expensive homes.

Lewis Land is currently progressing plans for a new flagship Gold Coast development, the $1.5 billion Harbour Shores master-planned community adjacent to its Harbour Town precinct.

In NSW, its biggest project is Sovereign Hills, a mixed-use master-planned community at Port Macquarie that is expected to deliver 2,400 residential lots over 20 years.