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ISPT sells major Brisbane CBD retail asset for $145m

170 Queen Street is anchored by H&M and Uniqlo

Australian property fund manager, ISPT, has sold 170 Queen Street Mall, Brisbane to a local private investor. The sale follows last week’s announcement to divest Eastgate Bondi Junction and two Melbourne CBD assets

JLL’s Retail Investments Australia, Nick Willis and Sam Hatcher exclusively sold 170 Queen Street for $145 million, which is anchored by H&M and Uniqlo and is only the second transaction along the premier retail strip of Queen Street Mall since 2019.

Acquired by ISPT Core Fund in 2011, the asset underwent a major redevelopment in 2016 with the introduction of the H&M and Uniqlo flagship stores. The gentrification of Queen Street Mall continues to accelerate with Louis Vuitton recently opening its new 1,370m2 flagship directly adjoining 170 Queen Street, while Tiffany & Co, Saint Laurent, and Paspaley have all opened new stores this year within the QueensPlaza.

Brett Williams, Core Fund Manager, ISPT said: “We are pleased to announce the sale of 170 Queen Street, a quality asset in a prime location and we are proud of having supported its redevelopment over the last decade.”

Willis said, “Opportunities to acquire prime mall frontage holdings in Australia are profoundly rare; and, with investment volumes across all retail sub-sectors down approximately 60% year-on-year, there is a weight of well-capitalised investors looking to deploy funds into quality holdings. The CBD retail sub-sector has been thinly traded, with only seven other transactions above $100 million occurring over the prior five years, highlighting the tightly held nature of the sub-sector and discerning capital participating to acquire assets.”

Brisbane’s population and tourism are experiencing notable growth as the city undergoes continuous development of major infrastructure. The government’s commitment of over $15.4 billion towards significant projects related to the 2032 Olympics, such as the Queens Wharf Precinct, Cross River Rail, and Brisbane Metro, further fuels this growth.

Hatcher said, “We are continuing to see a growing trend of Sydney and Melbourne-based investors looking to the Queensland market given its relative value and strong growth prospects. The state recorded a positive net migration of 31,000 persons over the 12 months to March 2023, one of only three states & territories to record positive migration over this period and 179% above the next closest state, being WA. This thematic further underpins the strong investment fundaments being a lack of retail floorspace supply and a growing population imbalance for the retail sector.”

Willis said “In speaking with our colleagues in other major CBD markets of London, NYC and Tokyo they are all experiencing a similar trend. We have seen down 49% in New York for CBD retail, and in Tokyo down 19% YOY or 34% down from pre-COVID transaction volumes. Further Private investors continue to lead transactions in all markets, where in London they have experienced an increase in Asian and Middle Eastern investors take advantage of the relative value.”

ISPT continues to hold strategic assets across Queensland including on the Queen Street Mall with 150 Elizabeth St, Wintergarden, 155 Queen St, Hilton Hotel and Uptown (in conjunction with Vicinity).

The sale is consistent with the ISPT Core Fund’s portfolio curation strategy which will see the proceeds reinvested into the Fund’s existing development pipeline in the high conviction sectors of Industrial and Health & Life Sciences.

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