New floats on retail scene
But analysts have said that while shoppers remain cautious, owning bricks-and-mortar malls is still favoured.
This is because of rising land values and the fact that landlords can generate income from a variety of areas in a mall, such as food courts, a percentage of cinema ticket sales, international fashion brands and mobile devices.
That helps to offset falling rents from discretionary goods such as mid-range fashion, homewares and high-end jewellery.
In the past six months more than $3 billion of retail assets have changed hands.
CFS Retail has added to the momentum with the conditional sale of four shopping centres in Victoria to the proposed Pacific Retail REIT, which is looking to float in the next few months with an initial raising of $400 million.
This comes after US private equity group Blackstone late last week filed a registration statement with the US Securities and Exchange Commission relating to the proposed IPO.
Frequently Asked Questions about this Article…
The article says several retail real estate investment trusts (REITs) are set to be offered as new floats in the coming months. Investors should pay attention because these floats arrive while the consumer sector is under pressure, but analysts still see value in shopping-centre assets due to rising land values and diversified income streams.
Analysts point to rising land values and the ability of mall landlords to generate revenue from multiple sources — not just rents. Diverse income streams such as food courts, a share of cinema ticket sales, international fashion brands and mobile-device related revenue help offset weaker rents from discretionary categories.
The article highlights food courts, a percentage of cinema ticket sales, income from international fashion brands and mobile-device related revenues as alternative income sources that can help offset falling rents from mid‑range fashion, homewares and high‑end jewellery.
According to the article, more than $3 billion of retail assets have changed hands in the past six months, indicating notable transaction activity in the retail property market.
CFS Retail has conditionally sold four shopping centres in Victoria to the proposed Pacific Retail REIT. That deal adds momentum to the REIT’s planned float, which is expected in the next few months with an initial raising of $400 million.
The proposed Pacific Retail REIT is looking to float in the next few months with an initial capital raising of $400 million, and it has received a conditional sale of four Victorian shopping centres from CFS Retail as part of its build‑up.
The US private equity group Blackstone filed a registration statement with the US Securities and Exchange Commission related to a proposed IPO, signalling interest from a major global investor in the retail or retail‑property space.
Investors should weigh that the consumer sector is under pressure and shoppers remain cautious, against positives such as rising land values, diversified mall income streams and recent high transaction volumes (over $3 billion in six months). Also note upcoming specific floats mentioned in the article — the Pacific Retail REIT’s $400 million raise and Blackstone’s filed registration — and consider reviewing offer documents and risk disclosures before investing.
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