Rich Lister Nick Andrianakos has invested for the first time in a major shopping centre, acquiring a $135 million-plus half stake in Adelaide’s Colonnades mall from the real estate empire accumulated by Perth property magnate Stan Perron.
The deal, struck on a generous yield of around 7 per cent, comes almost half a century after the Greek migrant bought his first petrol station in 1973, after cleaning at hotels and working on the General Motors assembly line.
It was the first of many for Mr Andrianakos, who went on to create the 54-asset Milemaker chain of petrol stations. In 2016, he sold the fuel retail business to Caltex in a $94 million deal, with Mr Andrianakos retaining the real estate to include in the growing commercial property portfolio of the family’s Nikos Property Group.
Nikos has been steadily increasing its exposure to the Adelaide market, acquiring a CBD office building at 50 Flinders Street in 2020 from Cbus Property for $175 million after two years earlier buying its companion tower, linked by bridges, at 60 Flinders Street from Lendlease for $101.35 million.
Nikos’s co-owner in the Colonnades mall is ASX-listed Vicinity Centres, whose biggest shareholder is another Rich Lister, John Gandel. Vicinity holds its stake in Colonnades on a $126.3 million book value and will manage the 86,500 square metre shopping centre.
“The opportunity to acquire a substantial shopping centre such as Colonnades that is professionally managed by Vicinity is a good opportunity for us and helps diversify our investment holdings,” Nikos chief executive Theo Andrianakos said in a statement to The Australian Financial Review.
On the sell side is Perron Group, established by Stan Perron, who died four years ago, aged 96, after assembling a $4 billion fortune spanning investments in office blocks, shopping centres, car distribution and iron ore royalties.
Since then, the Perron Group has been rationalising its holdings, ploughing proceeds from the divestment of some assets back into the platform’s development pipeline.
Managing director Ross Robertson said the sale of the Colonnades stake was consistent with that strategy of releasing capital for investment in other projects, including its proposed Cockburn Quarter development in Perth’s rapidly growing southern corridor.
The Adelaide transaction comes after a record $12.7 billion worth of interests in shopping centres changed hands last year, as the sector stabilised following the initial disruptions of COVID-19. Close to $4 billion in malls have put up for sale in the first part of this year.
“South Australian retail assets are tightly held and are generally highly sought after given their relative scarcity and value compared to other major metropolitan markets like Sydney and Melbourne,” said JLL’s Nick Willis, who brokered the Colonnades stake with colleague Sam Hatcher.
“We continue to see a significant pipeline of opportunities for capital partners to participate in the retail recovery and repositioning of shopping centres to extract additional value, with the experience of leading managers and specialists in the sector.”
South of the Adelaide CBD in the City of Onkaparinga, Colonnades sits on a 35.8-hectare site, making it the fourth largest shopping centre landholding in the country. Its anchor tenants include Coles, Woolworths, Aldi, Kmart, Big W and Dan Murphy’s.
Extracted from AFR