Hawaiian goes shopping for QIC’s Claremont Quarter stake

Hawaiian has taken full control of Perth’s Claremont Quarter by buying out its investment partner QIC for $207m.

Private investment house Hawaiian has taken full control of Perth’s Claremont Quarter by buying out its investment partner, funds manager QIC, in a deal valuing the stake at about $207m.

The move displays both the attraction of Perth retail – which is running hot – and the depth of demand for shopping centres from major players in the wake of their pricing reset.

While centre values were hit by the Covid crisis and then interest rate hikes, big owners are now more bullish in the sector as they see the value in existing assets.

QIC said it would sell its 50 per cent stake in Perth’s Claremont Quarter, one of Perth’s premium shopping and lifestyle destinations, in May, via real estate agencies CBRE and McVay Real Estate, and won interest within weeks of hitting the market.

It said the sale of Claremont Quarter, jointly held by the unlisted QIC Property Fund and QIC Town Centre Fund, was in line with client-endorsed strategies for both funds. The sale showed a capitalisation rate of about 6 per cent, industry players said.

QIC director of real estate capital markets James Doneley said the deal further showed the manager’s ability to deliver successful transactions on behalf of investors.

“While still subject to FIRB (Foreign Investment Review Board) approval, the pending purchase price was above QIC’s book value, which, if executed as planned, will be a very pleasing result for our investors and QIC,” Mr Doneley said.

“Moreover, the strong response to our expression of interest campaign in the past fortnight demonstrates that confidence is returning to the broader retail sector.”

Hawaiian already operates 11 Perth metropolitan shopping centres, and Claremont Quarter is about 9km southwest of the Perth CBD on a 2.7ha site.

The 29,800sq m centre is anchored by David Jones, Coles and Jack’s Whole Foods & Groceries, backed by five mini-majors and 118 speciality stores and kiosks. It sports a Zimmermann and a Sass & Bide store, alongside brands including Chanel and Georg Jensen.

Hawaiian chief operating officer Richard Kilbane said the pending acquisition also underpins its confidence in the property’s future, with the new Laneway precinct to open later this year.

The deal caps off about $2bn in WA shopping centre sales this year, including Vicinity Centres’ $420m purchase of Lakeside Joondalup and JY Group’s purchase of a half interest in Westfield Whitford City.

CBRE’s Simon Rooney and McVay Real Estate’s Sam and Dan McVay handled the sale.

Mr Rooney said the sales process generated investor engagement from domestic and offshore groups, institutional and private capital as well as local family offices ahead of Hawaiian exercising its rights.

“There are limited opportunities to secure a holding in a dominant and strong performing regional shopping centre, in this case one located in what is historically one of the more tightly held markets in Australia. Claremont Quarter is a premium retail offering, underpinned by one of Australia’s most affluent catchments with high retail spending, driving the centre’s impressive turnover performance,” Mr Rooney said.

“This transaction completes a week-long, $627 million splurge on regional shopping centres in Perth,” he said. “This signals the strengthening demand for regional shopping centres following a market recalibration,” Mr Rooney added.

Mr McVay said Claremont Quarter was a genuine fortress mall, positioned in one of Australia’s most affluent trade areas. “Its unique tenancy mix and strong productivity levels make it an exceptionally rare offering that will deliver above market income growth for the foreseeable future for owners well into the future,” he said.