High-end fashion precinct St. Collins Lane in Melbourne’s CBD hits market
St. Collins Lane in Melbourne’s CBD. Picture: Supplied
Melbourne-based Vantage Capital and its backer investment bank Credit Suisse have put the St. Collins Lane mall on the block after moving to reposition the property they picked up during the depths of the city’s lockdown.
That discount purchase in 2020 from JPMorgan Asset Management, which had paid $247m for the luxury asset when it picked it up from LaSalle Investment Management in 2016, marked the nadir of the city retail market and could again trade at about $120m.
Big buyers have since returned to cities.
Hong Kong-based real estate investment trust, Link REIT, last November swooped on a stake in three Sydney CBD shopping malls in a $538.2m deal. It bought the interest in the Queen Victoria Building, The Strand Arcade and The Galeries.
St. Collins Lane is set to undergo a major redevelopment which will kick off in the second quarter of 2023, and once complete, the precinct will feature a new food hall, fashion precinct and offices.
Cushman & Wakefield’s Nick Rathgeber and Leigh Melbourne and Colliers agent Lachlan MacGillivray are marketing the mall. The latter said investors rarely had the chance to acquire a 100 per cent interest in prime CBD retail assets in major capitals.
“Collins St attracts customers with a high-spend profile. The competitive leasing environment, high occupancy rates across the Melbourne CBD and strong daily visitation offers investors an exciting canvas for strategic remixing,” he said.
“St. Collins Lane is the exceptional ongoing and forecast population growth and planned investment from both local and state governments,” Cushman & Wakefield’s Mr Rathgeber added.
The mall was hit by the departure of British department store Debenhams in 2020 the vacancy is now being billed as a chance for a significant repositioning.
Premium CBD retail is currently in a period of high demand, Colliers said. National and global brands are chasing space and especially with the return of physical shopping and ongoing pandemic recovery.
Footfall and occupancy continue to rebound across the retail sector as a whole, with occupancy levels for retail assets sitting at 98.53 per cent, up from 98.44 per cent in the period to December 2021, Colliers said.
The Andrews government has also pledged more than $28bn into planned, under construction or near complete infrastructure projects while the City of Melbourne is also looking to rejuvenate the city.
And other city assets are now shifting.
A property comprising four ground floor shops, a first-floor restaurant and rooftop signage next to Melbourne Central shopping centre sold last week to a private investor with links to China for $32.61m.
JLL Melbourne CBD Sales and Colliers City Sales handled the disposal of 272-282 Lonsdale St for the private vendor who picked it up for $5.566m 19 years ago.
