Sydney’s iconic Queen Victoria Building (QVB) - home to some of the city’s most luxurious labels - has been partly sold to a Hong Kong retail giant as part of a multi-shopping-centre deal that could help revitalise the sector.
Fifty per cent of the prized QVB, alongside The Galeries and the Strand Arcade, are now in the hands of Hong Kong’s Link REIT, which picked them up for $538.2 million.
It’s the biggest retail deal since before the COVID-19 pandemic struck and is a positive sign for a sector still struggling to recover following a highly turbulent 18 months across the country, especially for Melbourne and Sydney.
Link REIT, which is the largest real estate investment trust in Asia, will co-own the buildings with the listed Vicinity Centres.
In a media release on its website, Link REIT chairman Nicholas Allen said: “The acquisition of this prime retail portfolio is part of our Vision 2025 growth strategy to diversify and improve our portfolio mix.
"We are excited to have captured an opportune moment to invest in these iconic Australian retail assets.”
The QVB is home to labels including Furla, Hugo Boss, Bally, Jimmy Choo, Dior, Coach and Mulberry.
It was built in 1898 in honour of Queen Victoria’s diamond jubilee. Its Romanesque-style architecture originally housed a concert hall, showrooms and coffee shops, and later was a library and offices.
In 2008, it underwent a $48 million refurbishment. The QVB is heritage-listed and is the second-most visited site in Sydney, only after the Opera House.
The sale comes as Sydney’s CBD continues its recovery following 107 days in lockdown this year after a rapid rise in COVID-19 infections across the city.
Roy Morgan revealed in late October that prolonged lockdowns had decimated movement across both Sydney and Melbourne CBDs, which was at just 17 per cent of pre-pandemic levels.
“The average 7-day movement level in the Sydney CBD hit a low of 8 per cent of pre-pandemic levels in late July and have slowly increased since then as restrictions have been eased as vaccination rates have increased rapidly,” the report stated.
Link REIT CEO George Hongchoy said the “rare portfolio” had been offered to the market for the first time.
“Given the high occupancy rate filled with leading Australian and international brands, the portfolio is well positioned to capture the retail rebound with the improving consumption sentiment in the country,” he said.
“Coupled with the strategic partnership with a leading retail asset manager in Australia, we believe both parties will jointly enhance the portfolio to ensure these landmark assets will deliver the best retail experience to all shoppers and unlock their long-term growth potential.”