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Makris Group Divests $110m Retail Portfolio

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Adelaide’s richest man, Con Makris, has offloaded two shopping centres in Adelaide for a combined $110 million, $90 million below his asking price.

The South Australian property tycoon, who commands an estimated personal fortune of $1.31 billion, listed the City Cross shopping centre in the Adelaide CBD, and North Adelaide Village neighbourhood complex in the wealthy suburb of North Adelaide, in August, with price expectations of $200 million.

The billionaire investor, who heads up South Australia’s largest privately-owned retail property group, relocated his head office to the Gold Coast in 2017 and has since redirected investment to the Sunshine State.

He has been selling down his portfolio of shopping centres and office towers in Adelaide, including a 15-storey building on King William Street for $43.1 million.

CBRE’s Simon Rooney together with James Douglas negotiated both shopping centre sales on behalf of Makris Group.

The City Cross shopping centre, which includes anchor tenants Harvey Norman, Rebel Sport and Australia Post, was picked up by Sydney property group Revelop for $60 million.

The transaction was struck on a passing yield of around 6.25 per cent.

The centre features a large food court and has 57 specialty tenancies overall. It also includes an adjacent office complex.

North Adelaide Village
▲ The North Adelaide village sits on a corner site and also offers future mixed-use development potential of up to six-storeys—subject to approvals. Image: Supplied


The North Adelaide Village Shopping Centre on O’Connell Street in North Adelaide, and an adjoining site, was sold to investment firm Greenpool Capital, with backing from private financier Qualitas.

The shopping centre is about 3km from the heart of the CBD. It is in a wealthy catchment area and close to the iconic Adelaide Oval and St Peter’s Cathedral.

“Retail centres are increasingly shifting toward mixed-use developments to drive foot traffic and increase trade,” Rooney said.

“In the case of City Cross, the sale provided an opportunity to acquire a major CBD retail holding offering multiple mixed-use development opportunities.

“This future flexibility was a major drawcard for Revelop, as was the centre’s strategic Rundle Mall location, which attracts 24 million pedestrian visitors annually.”

The City Cross Shopping Centre transaction represents the latest deal between the Makris Group and Revelop, after the Sydney group’s 2019 acquisition of the 9,964sq m Newton Village Shopping Centre in Adelaide’s north-western suburbs for $35 million.

The shopping centre will join Revelop’s two other South Australian retail investments—Renmark Square and Gawler Park Homemaker Centre.

While many landlords put planned disposals on hold during the pandemic, cutting the volume of retail investment sales over 2020 by almost half, more assets are now likely to come up for sale this year as investors tilt their portfolios away from retail.

“The long-term fundamentals for CBD retail remain strong,” Rooney said.

“They are underpinned by key demand drivers such as significant residential development, robust population growth, strong white-collar employment and both domestic and international tourism—which is expected to rebound post Covid.”

Late last year ASX-listed property fund manager Elanor Investors Group sold Auburn Central shopping centre in Sydney’s western suburbs to SCA Property Group for $129.5 million in an off-market deal.

New Zealand-based Cook Property Group listed the Entrada Shopping Centre in Sydney’s “second CBD” of Parramatta, with price expectations north of $40 million.

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Article originally posted at: https://theurbandeveloper.com/articles/makris-group-retail-portfolio-adelaide