A 50% stake in Adelaide’s successful Westfield Tea Tree Plaza is to be offered for sale on behalf of the AMP Capital Shopping Centre Fund (ASCF) amid increasing transaction activity and domestic and offshore investor demand for high-quality, fortress malls.
Strategically located in Adelaide’s growing north-eastern suburbs, approximately 15km from the CBD, Tea Tree Plaza is managed and jointly owned by Scentre Group.
Comprising a total gross lettable area of 99,873m2, the centre is anchored by Myer, Big W, Kmart and Target alongside a triple supermarket offering in Coles, Woolworths and ALDI and approximately 240 specialty stores and benefits from recent $40 million in upgrade works set to be completed by September this year.
Set on a land-rich and landmark site of 20.7ha, the centre provides for significant future expansion potential, to strategically cater for a growing catchment over coming years.
The centre also includes a popular dining and entertainment precinct, offering 10 restaurants and a HOYTS cinema complex, forming part of the most recent redevelopment of the centre in 2018.
CBRE’s Head of Retail Capital Markets – Pacific, Simon Rooney will steer the sale campaign.
“The sale campaign provides a sought-after opportunity to acquire a 50% interest in a dominant and strong performing regional shopping centre within Adelaide’s growing north-eastern suburbs,” Rooney said.
“A fortress mall of this quality is always tightly held, and we expect significant interest from both domestic and offshore groups, underpinned by the centre’s robust investment fundamentals, Adelaide’s attractive retail yield spread relative to Sydney and Melbourne, and South Australia’s stamp duty exemption on commercial transactions.”
Westfield Tea Tree Plaza sits on a land-rich and landmark site of 20.7ha
Tea Tree Plaza boasts robust annual retail sales of $532 million and has a specialty productivity rate of $12,396/m2 – 28% above the Urbis 2022 ‘Regional Shopping Centres’ benchmark of $9,680/m2.
Major tenants report a combined $246 million in sales per annum and have a long WALE of 9.5 years by GLA and 9.8 years by income. Together with the major tenants, the centre is securely leased, with major and national chain retailers representing 94% of total GLA and 88% of total gross rental income.
The centre draws 9.7 million customers annually and currently caters to a significant trade area population of over 440,253 residents, forecast to reach 487,795 residents by 2041.
The retail spend in the Total Trade Area was estimated at $7.5 billion in 2023, while the total retail spend by the Main Trade Area was estimated at $4.8 billion.
“South Australia’s strong economic fundamentals are helping to fuel interest in high-quality retail investment opportunities,” Rooney noted. “This includes the state’s historically low unemployment rate, relatively strong growth in average weekly earnings, forecast population growth and resilient residential market, which will support future growth in retail spending conditions.
“South Australia is also set to benefit from major Defence projects, including Australia’s future nuclear submarine program, which is set to create over 8,000 jobs, further supporting the state’s population growth.”
