Fortius, one of Australia’s longest serving specialist property investors in partnership with the ASX-listed Irongate Group through its wholesale funds management platform, has today announced the acquisition of Rundle Place, a premium CBD retail shopping complex in the heart of Adelaide’s Rundle Mall.
Rundle Place is home to South Australia’s only Apple store, the Adelaide City Library, a full line Coles supermarket, and more than 50 specialty shops.
As part of the acquisition, Fortius has secured the adjoining Grenfell Street Carpark, on a current passing income of 5.8%. Regarded as one of the strongest performing car parking stations in the CBD, it features 500 car spaces over seven levels and directly integrates with the four-level retail centre, attracting a diverse mix of workers, local residents and shoppers.
Sam Sproats, Fortius Chief Executive said the purchase of Rundle Place and Grenfell Street Carpark highlights the group’s 30-year track record in identifying quality, well located assets underpinned by strong market fundamentals.
“The acquisition demonstrates our confidence of the value proposition in this transaction and we’ll again roll the sleeves up to achieve our vision,” said Sproats. “There is resilience in the retail sector and it’s bouncing back quickly, supported by an overwhelming amount of investor interest we have received.
“We’re excited to be working in partnership with Irongate to enhance what is the premier retail offering within the Adelaide CBD, and apply the Fortius skillset to revitalise the tenant mix and introduce leading national and international brands to Adelaide.”
The Irongate managed Irongate Templewater Australia Property Fund, an Australian and New Zealand focused real estate opportunity fund, came on as anchor investor to support Fortius’ business plan, recognising the rare opportunity to acquire a prime asset at below land and replacement cost.
Graeme Katz, Irongate Group Chief Executive, said Irongate is proud to have partnered with Fortius on this acquisition in the heart of Adelaide’s CBD.
“Rundle Place is a landmark asset and has been acquired by the Irongate Templewater Australia Property Fund,” Katz said. “The acquisition of Rundle Place is another example of our focus on strong property fundamentals. Our wholesale funds management program allows us to take advantage of these kind of deep value opportunities and we look forward to working with Fortius on unlocking further value.”
Adelaide’s positive economic and retail recovery supports Fortius’ planned upgrades to attract an array of customers as they continue to return to bricks-and-mortar stores seeking unique experiences, convenience, and a diverse selection of retailers and service providers.
South Australia accounts for only 2% of the country’s COVID-19 cases to date, resulting in the local economy re-opening ahead of expectations and eager consumers spending at Rundle Place.
McVay Real Estate Managing Director, Sam McVay – who alongside Knight Frank facilitated the deal – said Adelaide is realising notable growth, which is appealing to investors.
“The city is witnessing a substantial increase in institutional interest off the back of a $5 billion government project spend, zero stamp duty regime and rapidly developing CBD. This transaction is evidence of the increasing levels of investor demand for high quality retail assets in locations with strong fundamentals such as Adelaide,” McVay said.
Fortius’ funds under management are now in excess of $1.75 billion, with assets across urban retail, mixed-use, office and education sectors located in major capital cities and metropolitan markets along the eastern seaboard of Australia.