Nuveen Real Estate sells stake in Mt Ommaney SC for $285m

Last February, Vicinity Centres was permitted to build a five storey extension at Mt Ommaney Shopping Centre configured with car parking and cinema, dining and entertainment precincts.

Nuveen Real Estate – one of the world’s largest investment houses with funds under management worth A$180 billion – has sold its three quarter stake in Brisbane’s Mt Ommaney Shopping Centre.

Co-owner, YFG Shopping Centres, controlled by the Fu family, formerly of Taiwan, is spending $285 million for full ownership.

It outlaid $94.5m last November to acquire its 25 per cent interest – and management rights – from Vicinity Centres.

CBRE head of Retail Capital Markets, Simon Rooney, represented both vendors.

Mt Ommaney Shopping Centre

About 14 kilometres south west of Brisbane, across the Brisbane River from The University of Queensland’s Pinjarra Hills campus, the Mt Ommaney complex at 171 Dandenong Road was built in 1979 as Centenary Shopping Centre.

In 1996 and 2008 then-owner AMP Australian Core Property Fund extended it.

Six years ago AMP Capital sold it on a 6.25 per cent yield for $416m: Nuveen, a subsidiary of New York based TIAA formed from TIAA CREF and Henderson Global Investors picked up 75 per cent – its first Australian investment. The balance was acquired by Federation Centres which went on to be rebranded Vicinity Centres.

Today Mt Ommaney Shopping Centre contains 56,469 square metres of lettable area, which Mr Rooney said makes it 55 per cent bigger than its next significant retail competitor.

Aldi, Big W, Coles, Kmart, Target and Woolworths are anchor tenants.

The complex is approved for an 11,481 sqm extension with a cinema, dining and entertainment precincts, an improved bus interchange and more car parks.

Nuveen still holds Australian retail investments

Nuveen Real Estate head of Asia Pacific, Nick Evans, said the sale price reflects a premium to book value.

“The disposal further illustrates our growing track record and skillsets in this highly sophisticated market in spite of ongoing headwinds for the sector”.

The passing yield is 6.25 per cent, as it was in 2014.

Elsewhere in Australia, the company owns 50 per cent of Greenwood Plaza in Blue Street, North Sydney, and a third of Melbourne’s Myer Bourke Street.

YFG meanwhile, directed by Gordon Fu, controls 20 shopping centres in south-east Queensland, amongst them Australia Fair on the Gold Coast and Brookside Shopping Centre in Brisbane’s north west Mitchelton.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco