TH Real Estate has acquired a 33% interest in a highly coveted retail property asset, the building that houses the Myer Department Store in the heart of Melbourne, for AUD151.3m (€103m).

The fund manager bought the stake from the Myer Family, becoming a co-investor with Singapore’s GIC and the listed Australian shopping centre owner-manager Vicinity Centres.

Nick Evans, head of Australia at TH Real Estate, said: “We have confidence in the location and feel it is an irreplaceable type of asset, offering strong income stream over the long term.”

The building is fully let to the Myer Department Store.

The Myer flagship store and the adjoining properties underwent substantial refurbishment after a consortium comprising CFS Retail Property Trust (now Vicinity), GIC and The Myer Family Company acquired and redeveloped the complex for a total of around AUD1.1bn in 2007.

“We certainly see the benefit of CBD retail opportunities, whether in Australia or offshore, based on continued population growth and urbanisation,” said Evans.

“This sort of asset is well placed to benefit from these long-term structural trends.”

Evans said that, as with its previous acquisitions, the Myer Centre was being acquired by TH on behalf of clients and its parent organisation, TIAA.

With the latest purchase, TH Real Estate has reached its initial billion-dollar investment threshold for Australia. 

So far, TH Real Estate has acquired the Greenwood Plaza and an office tower in Sydney for AUD305m, a 75% stake in the Mount Ommaney Shopping Mall in Queensland for AUD312m and an office building in Melbourne for AUD73m.

Evans said: “We continue to look for interesting opportunities for clients or third-party investors.”

He said Australian cities were competitive but no more so than other sophisticated cities in the world.

It helped, he said, having “eyes and ears” on the ground in a highly competitive market to secure prime assets.