JP Morgan Asset Management to sell St Collins Lane – formerly known as Australia on Collins

The multi-level former Australia on Collins complex, with 9301 square metres of lettable area, underwent a $35 million before reopening as St Collins Lane in 2016.

JP Morgan Asset Management is selling its St Collins Lane shopping centre after less than four years.

The Melbourne CBD complex, once known as Australia on Collins, is expected to trade for more than $150 million according to sources.

CBRE’s Simon Rooney has the listing.

JP Morgan paid LaSalle Asset Management $247 million for St Collins Lane in late 2016 – only a few months after the five storey shopping centre reopened following a $35 million renovation.

With 9301 sqm of area comprised as 45 tenancies, including in a food court, JP Morgan struggled to fill the complex immediately, with a tranche of tenants moving in, two years ago.

Twelve more occupiers including Germany based camera maker Leica set up shop at 260 Collins Street last year.

Department store Debenhams, which occupied about 4000 sqm within the lower-ground-basement since October, 2017, vacated five months ago.

St Collins Lane offers little development upside with the airspace accommodating a 380-room Novotel hotel which LaSalle offloaded separately to the retail component, banking $237 million, also in 2016.

Mr Rooney sold both investments for LaSalle.

LaSalle picked up Australia on Collins and the Novotel Hotel in 2011, paying a total of $204 million.

Separately today, JP Morgan Asset Management listed an A-grade Melbourne office at 26 Freshwater Place, Southbank, with a price guide of more than $400 million. The 25-level, 34,000 sqm commercial building is being marketed by JLL’s Leigh Melbourne and Nick Rathgeber.

Opportunity for a strategic tenant remix: agent

Mr Rooney said Debenham’s departure from the Australian retail market and its St Collins Lane tenancy provided “significant upside potential for an incoming purchaser and the ability to undertake a planned and multi-faceted re-leasing strategy to capitalise on continued and significant demand from ‘new entrant’ retailers and the centre’s high-profile location, linking through to Melbourne’s Bourke Street Mall”.

The executive added St Collins Lane is situated “within Melbourne’s ‘Golden Mile’…one of the city’s most trafficked retail destinations and one of the most sought-after shopping precincts in the country”.

The centre draws from one of the largest retail catchments in Australia, Mr Rooney said, with a annual retail expenditure pool of $67.9 billion – a number forecast to grow 4.3 per cent each year for 15 years.

“This is underpinned a captive trade catchment of an affluent surrounding worker market, a bustling tourism market with 35.8 million visitors to Melbourne in the year to June 2019, providing retailers the opportunity to benefit from longer trader hours and diverse customer base”.

More than 240,000 predominantly white-collar workers are within a kilometre radius of the centre.

Last year, David Jones listed its six-storey menswear store at 299 Bourke Street – also with $150 million-plus price expectations.

The St Collins Lane offering comes four months after David Jones listed its historic menswear store, at 299 Bourke Street (pictured, right) – a property also expected to sell for more than $150 million.

The four and six storey Bourke Street Mall complex, also with frontage to Little Collins Street, includes 11,814 sqm of area the vendor plans to vacate in the short-term (David Jones will use sale proceeds to reconfigure and renovate its flagship store across the road at 310 Bourke Street).

Built in the 1930s, replacing the popular Coles book arcade, 299 Bourke Street, on a 2232 sqm block, is also being marketed by Mr Rooney with colleague Mark Wizel.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco