Rich Lister strikes three with $170 million Adelaide mall deal

Since then, the billionaire has parlayed that wealth into a growing commercial property portfolio. Along with office towers, the retail theme features highly in that portfolio and Mr Andrianakos’ acquisitions are getting chunkier.

The latest deal involves a half stake in the Elizabeth City Centre, an 80,000 square metre major mall in Adelaide’s north, whose retailers turn over close to $450 million annually.

The 50 per cent interest was acquired from ASX-listed mall owner Vicinity Centre, which retains the remaining half and will manage the centre which has both Coles and Woolworths supermarkets, Big W and Target outlets, a cinema complex and 135 specialty tenants.

It is the third time in as many years that the Rich Lister through the family’s Andrianakos Property Group has teamed up with shopping centre giant Vicinity. Last year, the billionaire bought a half-stake in a Vicinity-run mall in Melbourne’s north for $134.5 million.

In 2022, Mr Andrianakos made his first foray into the big mall sector with a $138.2 million investment in Adelaide’s Colonnades centre, also co-owned by Vicinity.

Buying into upside

Mr Andrianakos, ranked 90th on the Financial Review Rich List, looks to be buying into an upside. Shopping malls are one of the few sectors to show signs of growth this year as the broader commercial real estate recovers from disruption and falling values caused by higher rates.

Wholesale funds that hold retail real estate – compared to industrial and office funds – were the only sector to record positive capital growth in the third quarter, their first gain in two years, according to MSCI.

Quarterly deal volumes are up 24 per cent year-on-year, while year-to-date retail property transactions have reached $6.9 billion, a 43 per cent increase.

Vicinity recorded a June 30 valuation for its full ownership of the Adelaide mall at $330 million, with the Andrianakos transaction effectively indicating a moderate rise in value since then. Vicinity logged the June 30 capitalisation rate – akin to an investment yield and a key valuation metric – at 7.5 per cent.

The tie-up between the Andrianakos family and Vicinity is proving productive, with son Theo Andrianakos, who now leads Andrianakos Property Group, working with Vicinity this year to introduce Bunnings into their co-owned Colonnades mall, a first for the Vicinity portfolio.

For Vicinity, the deal is further evidence of how keen chief executive Peter Huddle is to push ahead on a strategy of recycling capital that had been locked up in some assets into the group’s development pipeline.