Challenger sells Tasmanian mall for record price
Challenger Group has sold Channel Court, one of Tasmania’s largest shopping centres, to Adelaide-based Nick DiMauro for $82.5 million in what is the state’s biggest mall deal on record.
The deal forms part of Challenger’s efforts to sell down its retail assets to recycle capital into new projects. Last month, it sold its stake in a shopping centre in remote Western Australia for about $48 million to Melbourne syndicator Fawkner Property.
Following those divestments and property writedowns – the investment management firm reported $105.5 million in property devaluations at its 2024 interim results – Challenger’s portfolio has downsized by about $300 million to $3 billion in the past 12 months.
The Hobart sale reflects a fully leased initial yield of 7.5 per cent, and is about a 7.5 per cent discount from its 2022 peak value of $89 million.
Channel Court is the only sub-regional shopping centre south of Hobart CBD, comprising 25,000 square metres of gross lettable space with Woolworths and Big W as its anchor tenants.
Challenger acquired the mall in 2015 for $76 million from the Tasmania-based Behrakis family, in what was then the largest Tasmanian retail deal until the latest transaction. The next largest individual retail sale in Tasmania was Northgate Shopping Centre for $70.1 million in 2009.
The Channel Court deal – brokered by JLL’s Nick Willis and Sam Hatcher – is also the latest example of how boutique fund managers and family offices have become beneficiaries as major landlords look to recycle capital. Other recent examples include Vicinity’s divestments of Maddington Central and Dianella Plaza to syndicators.
“We are continuing to see a shift in the weight of capital seeking these sub-regional assets, both locally and offshore. The buyer profile continues to evolve, with buyers attracted to the sector’s fundamentals and value propositions,” Mr Willis said.
“In the prior four years, an accumulative 77 per cent of sub-regionals sold have been to syndicators and private investors. In the prior four years to that [2019 to 2015], conversely, 76 per cent was to institutional owners.”
The Channel Court sale brings retail transaction volumes to $1.8 billion for the year so far, which is in line with last year but still 41 per cent down from the three-year historical average.
