QVB, The Strand Arcade and The Galeries change hands in $538m transaction

QVB, The Strand Arcade and The Galeries change hands in $538m transaction

The iconic Queen Victoria Building in the heart of Sydney.

A 50 per cent interest in a portfolio of iconic retail properties in Sydney has been sold for $538.2 million to Hong Kong’s Link REIT, making the trust the new owner of the Queen Victoria Building (QVB), The Strand Arcade and The Galeries.

The landmark transaction represents Australia’s largest CBD shopping centre deal since late 2017 when Vicinity Centres acquired a 50 per cent stake in the same trio of centres that it continues to manage.

CBRE head of retail capital markets – Pacific, Simon Rooney, introduced Link REIT and EG Funds (Link REIT’s investment manager in Australia) and negotiated the sale on behalf of Singapore sovereign investor GIC.

“The Link REIT/EG acquisition is expected to instil further confidence into Australia’s retail investment sector, demonstrating the enhanced institutional demand for core retail assets and the ongoing investor confidence in the future of CBD retailing,” Rooney said.

“Assets of this scale, quality and reputation are rarely sold and in the case of The Queen Victoria Building, The Strand Arcade and The Galeries, this was the first time the portfolio had been publicly offered to the market.

“These iconic centres are regarded as among the best in Australia and dominate Sydney’s core retail precinct, which is positioned for recovery following the end of lockdowns, as workers, tourists and shoppers return to the CBD.”

The Galeries

The three Sydney centres serve a resident total trade area of 3.8 million people, being the most densely populated residential area in Sydney and one with a combined retail spending power of $60.6 billion. The centres also cater to a fully returned Sydney CBD workforce of 168,460 – the largest in Australia

At the start of 2020, the centres had a moving annual turnover (MAT) of $613 million and attracted 61 million visitors per annum. The Strand Arcade ranks first and QVB ranks second in Australia for total MAT, while The Galeries ranks fourth in Australia for total specialty MAT.

The assets have a gross lettable area of 34,877sqm and comprise 334 tenants, 46.1 per cent of which are unique and do not have another store in Sydney’s CBD.

The QVB comprises one of the largest footprints in Sydney’s core retail precinct, with almost 200 metres of frontage to George Street. It is recognised as Australia’s largest Victorian Arcade and an historic Sydney landmark.

The Strand is the only remaining arcade of its design in the CBD and is regarded as a premium retail centre housing many of Australia’s best designers, while The Galeries is a lifestyle and cultural destination for fashion and dining that offers a unique shopping experience.

"Given the high occupancy rate filled with leading Australian and international brands, the portfolio is well-positioned to capture the retail rebound with the improving consumption sentiment in the country," Link REIT CEO George Hongchoy said.

"Coupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential.” 

The acquisition of the 50 per cent in the retail portfolio is Link REIT’s latest Australian investment, and follows its $683 million purchase of Sydney’s 100 Market Street office tower two years ago.

The Strand


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