Whole-of-Centre Refurb Revealed for Myer Centre

New details on the future re-lifing of Brisbane’s former Myer Centre have been revealed in the wake of the departure of its anchor tenant.

Doing the interview rounds for the announcement of its full-year results this week, co-owner Vicinity Centres chief executive Peter Huddle has let slip the plan is for a “whole-of centre refurbishment”.

“We essentially have a large retail redevelopment planned for there which is retail, leisure, food and beverage plus entertainment,” he told media.

But he said works on the “circa $500-million” redevelopment were not likely to begin until the 2024-25 financial year.

It also has been indicated the plans will include an aquarium, escape room, arcade, laser tag arena and indoor ski-field.

The six-floor, 63,026sq m retail asset fronting the Queen Street Mall in the heart of the Brisbane CBD has already been rebranded Uptown but future plans for the complex have been kept under wraps since Myer closed its doors at the end of July.

Its 1.27ha site is ripe for redevelopment with planning overlays enabling up to 30 storeys.

Huddle told News Corp media it would “probably be about 12 months of pre-development plus working with the Brisbane City Council on planning outcomes” before the revitalisation and repositioning of the centre was undertaken.

“The centre is an ideal location and very well connected,” he said.

“Obviously with the timing, with all the major infrastructures occurring around the Brisbane CBD at the moment, we think we‘re well positioned for the rejuvenation of that asset.

“It will allow us to open up that opportunity for really significant national and domestic retailers to put their flagship stores on the ground level in the middle of the Brisbane CBD.”

Myer had been the anchor tenant since the centre—once the country’s largest CBD retail development—was built in 1988.

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▲ Brisbane’s former Myer Centre has been rebranded as Uptown and a major rejuvenation of the CBD retail asset is in the planning.

After months of negotiations, the retailer chose not to exercise its option for lease renewal, closing the door on its 35-year five-level, 28,000sq m tenancy.

At the time, Myer chief executive John King said the company was seeking “an alternative CBD location” to continue to have a presence in Brisbane’s city centre.

The centre—including lucrative basement carparking with 1450 spaces— currently has 122 tenants but at its peak it was home to about 230 stores.

Superannuation fund-backed ISPT paid $366 million in 2012 for a half stake in the asset at the George Street end of Queen Street Mall. It acquired an additional 25 per cent stake from Vicinity in 2016, taking its ownership share to 75 per cent.

ASX-listed Vicinity Centres posted a net profit of $271.5 million in 2022-23, plunging from a $1.215-billion profit the previous year. The drop came off the back of a $195.9-million writedown in property values, following a $633.3 million increase in 2021-22.

Its results were buoyed by a significant 14.5 per cent increase in funds from operation driven by a 12.1 per cent uplift in net property income to a pre-Covid level of $900.2 million.

Huddle said it had been “a year of resilience and growth at Vicinity”

“During the year, we deliberately executed at pace while the retail sector was favourable,” he said.

“We delivered a significant level of high-quality leasing outcomes, focused on enhancing the retail mix of each centre and reducing our income at risk, while simultaneously negotiating favourable leasing spreads.

“Furthermore, we have continued to invest our capital to progress development approvals and execute project activity that will ultimately deliver long term value to our stakeholders, despite near-term, heightened macroeconomic uncertainty.”

Article source: Queensland Property Investor