Retail in Asia

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Link REIT invests in three iconic retail properties in Australia

Link Real Estate Investment Trust (Link REIT) announced that it is acquiring 50 percent interests in the three retail assets in Australia, namely Queen Victoria Building, The Galeries and The Strand Arcade at a total consideration of AUD 538.2 million (US$339 million).

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Nicholas Allen, Chairman, said, “The acquisition of this prime retail portfolio is part of our Vision 2025 growth strategy to diversify and improve our portfolio mix. We are excited to have captured an opportune moment to invest in these iconic Australian retail assets.”

George Hongchoy, Chief Executive Officer, said, “The rare portfolio, sitting in the heart of Sydney CBD, was offered to the market for the first time. Given the high occupancy rate filled with leading Australian and international brands, the portfolio is well-positioned to capture the retail rebound with the improving consumption sentiment in the country. Coupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential.”

Source: Link

Located in the central business district of Sydney, one of Australia’s most sought-after retail precincts, the portfolio has a diversified tenant base and natural footfall from central business district workers, local visitors and international tourists. Based on the valuation report carried out by Link as at 25th October 2021, the portfolio occupancy stood at 94.3 percent.

Source: Link

Queen Victoria Building, as a heritage-listed late-nineteenth-century building, is the second most visited site in the city after Opera House. The Strand Arcade, which is also a heritage-listed retail arcade, aims to offer a unique tenant mix for domestic consumers, while the Galeries is positioned as a lifestyle and cultural destination for fashion, art and dining.

Source: Link

The portfolio possesses strong productivity in terms of total moving annual turnover per square metre with the Strand Arcade and Queen Victoria Building being ranked first and second in Australia and the Galeries ranked fourth in specialty.

Since 2018, the portfolio has been managed by Vicinity. After completion of the acquisition, Vicinity will continue to manage the portfolio with its specialised and experienced retail team, and Link will work closely with Vicinity as a co-owner to curate and position the portfolio dynamically to better serve the needs of shoppers and the broader community in the long run.

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Link will fully fund the acquisition through its cash resources and debt facilities. Upon completion, Link’s ratio of debt to total assets will change from 20.1 percent to 21.4 percent, based on its consolidated financial position as at 31st March 2021.

The transaction is expected to complete in the first half of 2022.