AMP Capital Funds Buy $800m Stake in Indooroopilly Shopping Centre

After being put on the block in August the Commonwealth Superannuation Corporation has sold half of Indooroopilly Shopping Centre to two AMP Capital funds in a deal worth more than $800 million.

The AMP Capital Shopping Centre Fund and the AMP Capital Diversified Property Fund have each acquired a 25 per cent stake in the centre from Eureka-Real Assets, acting on behalf of Commonwealth Superannuation Corporation.

AMP Capital has assumed management of the super-regional centre on behalf of investors, which is located seven kilometres from the Brisbane CBD.

Operational since 1970, Indooroopilly Shopping Centre underwent a major redevelopment in 2014 and currently comprises a gross lettable area of 116,447 square metres.

[Related reading: Indooroopilly Shopping Centre Sale Expected to Reap $1 billion]

AMP Capital said the centre represents a compelling investment opportunity for the funds’ investors due to its long-term asset management and development potential underpinned by leases to seven major tenants such as Myer, David Jones, Coles and Woolworths, and 14 mini majors including H&M and Uniqlo.

It says retail spend in the area is forecast to increase from $3.2 billion currently to $3.8 billion in 2021. The centre also offers long-term mixed-use development opportunities including the potential to add 90,000 square metres in gross floor area.

Indooroopilly Shopping Centre, which was once a Westfield Shopping Centre, was listed by JLL and Colliers who conducted the expressions of interest campaign. The total site area of the centre is approximately 7.8 hectares.

AMP Capital Shopping Centre fund manager Conrad Sinclair said the acquisition of the stake in was in line with the fund’s strategy of owning super-regional retail assets that dominate their trade area and with further potential for expansion.

“The deal follows a successful $200 million equity raising for ASCF, which was oversubscribed indicating the appeal these assets hold for investors.”

AMP Capital Diversified Property fund manager Kylie O’Connor said that Indooroopilly is a good fit for the fund's portfolio.

"It is consistent with the fund’s strategic objective to hold a diversified portfolio of high-quality assets across sectors, with a higher weighting towards regional and super-regional retail assets.

“We also believe now is the right time to invest in south-east Queensland due to improving economic conditions and strong population growth in the state," O'Connor said.

AMP Capital also owns the recently-redeveloped Pacific Fair on the Gold Coast.

AMP Capital have invested a net $1.7 billion of capital across the commercial and retail sectors in 2017. This year they have invested heavily in the commercial sector with the Wynyard Place acquisition together with smaller acquisitions in Melbourne, Mascot and the Brisbane fringe markets.

[Related reading: Australia’s Top Buyers and Sellers for 2017]