Major US investment bank Morgan Stanley has entered into a partnership with Stockland on a retail property portfolio across three town centre sites.
The deal – Morgan Stanley’s first-of-its-kind in Australia – has been called a “significant evolution” for the sector.
In an off-market deal brokered by JLL, Morgan Stanley now has a stake in Stockland’s three-asset town centre portfolio worth around $220 million. Comprising Stockland Gables, Providence, and Sienna Wood, each location is anchored by Woolworths and Coles, with over 90 per cent of gross income coming from non-discretionary and service-based sources.
“We are witnessing a marked increase in demand from equity investors globally for retail,” said Luke Prokuda, executive director at JLL. “This represents a significant evolution from the cautious positioning we saw just two to three years ago.
“What’s particularly notable is that we’re now seeing positive capital inflows into wholesale retail funds again, despite broader macroeconomic uncertainty including elevated interest rates and geopolitical volatility. This demonstrates that sophisticated institutional investors increasingly view well-located retail as a defensive allocation that can deliver stable income and capital preservation through market cycles.”
JLL said that the creation of new retail floorspace in neighbourhoods is forecast to decline by around 73 per cent over the next five years, compared to the previous decade. This runs counter to Australia’s growing population, which it calls a “supply-demand dislocation”.
“Establishing a new partnership of this scale with a global institution such as Morgan Stanley reaffirms the depth of capital being directed toward Australian retail more broadly,” added Nick Willis, executive director at JLL.
“Retail is now the most actively traded asset class in Australia, underscoring deepening liquidity and renewed confidence in the sector.”
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