In 2016, it was billed as “Melbourne’s newest premier fashion destination”, a re-branded inner-city mall that had just undergone a major $30m facelift, but now St Collins Lane is being sold for less than half of what JP Morgan paid for it just four years earlier.
The Australian Financial Review reports that a “local fund manager backed by offshore capital” will pay $120 million for the multi-level mall, a mere patch on the $247m JP Morgan parted with in 2016.
Coronavirus is only part of the story though, with a 40 per cent vacancy rate in 2017, and the 2019 closure of basement store Debenhams, causing headaches for JP Morgan. The top floor in particular failed to secure long-term tenants, a ghost town surrounded by a bustling city centre.
With mall vacancy rates now at a 20-year high across Australia, and one in 10 CBD stores sitting empty, it is a particularly tough time for shopping centre owners.
Despite this, there is hope on the horizon. Crown Group has announced plans to build a billion-dollar retail portfolio based around shopping centres, while two Sydney centres sold this week in a bundle deal worth $91m, which was the pre-COVID valuation for the two malls.