Unlisted funds drive record year for retail property
Increased investment from unlisted funds, offshore investors and superannuation funds saw Australia's retail property sector record $7.5 billion of investment in 2014, a report from property group JLL revealed.
While 2014 was a year of record investment in the retail sector, JLL reported that the average transaction size had dipped 28 per cent to $40 million.
Overall, unlisted funds accounted for 46 per cent of the value of transactions ($3.3 billion) in 2014, increasing their investment in retail property by $1.5 billion, which JLL attributed to "the significant increase in the participation by Real Estate Investment Trust (REIT) managed wholesale funds".
While other unlisted funds such as AMP Capital's AMP Capital Shopping Centre Fund, were also significant buyers, with purchase of a 50 per cent stake in Stockland Townsville Shopping Centre for $228.7 million.
TIAA Henderson Real Estate was among the major offshore investors, who ploughed $1 billion into retail property in 2014, picking up shares in North Sydney's Greenwood Plaza and Mount Ommaney in Brisbane, for a combined total of more than $620 million.
JLL reported that acquisitions by super funds had "slowed notably" from previous years, but through a number of "smaller retail acquisitions" of sub-regional centres, they increased their investment in retail property by $148 million in 2014.
While unlisted funds, offshore investors and super funds increased their investment in the sector, private investors were net sellers in 2014 having sold off $1.8 billion worth of assets, while picking up just over $1 billion worth of retail property.
AUTHOR
Nicholas O'Donoghue
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