Two major retail assets in Melbourne CBD - The Strand and the General Post Office - are up for sale on behalf of super fund manager ISPT.
CBRE’s Simon Rooney and James Douglas along with Colliers’ Lachlan MacGillivray have been appointed to manage an international Expressions of Interest campaign.
The assets occupy prime positions within Melbourne’s ‘Golden Mile’ core retail precinct. The Strand is home to international fashion brands such as COS, Midas, ASICS, and Acne Studios, with a Tiffany Treloar pop-up outlet.
The GPO is home to Australia’s largest H&M flagship store, secured on a brand-new 10-year lease through to March 2034.
Melbourne’s GPO was originally constructed in 1859 and was utilised as Melbourne’s General Post Office until 1992.
“Premium, flagship CBD retail assets are always tightly held, rarely traded, and continue to be one of Australia’s most pursued retail investment opportunities,” Rooney said. “We anticipate an extremely competitive domestic and international buyer pool, given the scale, quality and location of these assets and the ongoing investor confidence in the future of CBD retailing.
“Melbourne is uniquely positioned to capitalise on the exceptional rebound in tourism following the COVID-19 pandemic, with domestic tourism expenditure up 32% on 2019 levels in addition to Melbourne being Australia’s fastest growing capital city – set to overtake Sydney by 2031 and home to over nine million people by 2056.”
MacGillivray said the sale of major Melbourne CBD assets is rare, particularly retail centres.
“Their rarity is such that they have accounted for just 1.6 per cent of all CBD retail transactions since January 2018, with the last Victorian CBD deal struck over two years ago,” MacGillivray said.
“The two assets are expected to be highly sought after and following the incredibly robust sale of Louis Vuitton in 2020 at an impressively low yield of 2.4 per cent and sale rate of $40,915, we expect the pent-up demand for assets of this nature to garner a strong reception from the market.”
According to CBRE, both assets draw an annual retail expenditure pool of $84.3 billion, which is forecast to experience robust growth of 4.4% per annum to 2041, to reach $168.0 billion.