Makris sells $110m of retail property as neighbourhood centres take off

Property firm Makris Group has divested from a further $110 million of its portfolio, selling off the City Cross Shopping Centre in Rundle Mall as well as North Adelaide Village.

CBRE’s Simon Rooney and James Douglas negotiated both transactions, and said they showed demand for both CBD and neighbourhood retail assets remained strong.

City Cross Shopping Centre sold for $60 million, while North Adelaide Village sold for $50 million.

“The long-term fundamentals for CBD retail remain strong, underpinned by key demand drivers such as significant residential development [and] construction, robust population growth, strong white-collar employment and both domestic and international tourism – which is expected to rebound post-Covid-19,” Rooney said.

However, with the pandemic still in play, neighbourhood centres have taken much of the limelight in recent months – as customers keep their distance from CBD and city centers in an attempt to avoid potential Covid hotspots.

“While total transaction volumes have fallen considerably from 2019 levels, the share of neighbourhood transactions has increased substantially from 17 per cent of all retail deals in 2019 to 62 per cent in the year to date,” Rooney said.

And, since the pandemic kicked off, Rooney said the amount of capital being injected into the non-discretionary retail space has spiked due to the space’s resilience and performance during Covid-19.

These sectors, in neighbourhood centres, are booming. Non-discretionary retail represents 86 per cent of North Adelaide Village’s annual turnover, and 79 per cent of its total gross income.

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