SYDNEY: The troubled Direct Factory Outlets (DFO) business has been rescued by Colonial First State Retail Property Trust (CFX).
CFX today announced it will acquire four DFO outlets from Austexx Proprietary Limited, for a cost of $498 million.
The locations in the portfolio include DFO centres in Homebush, NSW and Essendon and Moorabbin in Victoria. It will also acquire a 50 per cent interest in DFO South Wharf, Melbourne.
The news comes after months of speculation as to the fate of the business, with the DFO South Wharf complex reportedly $550 million in debt.
CFX head of head of property Darren Steinberg said the purchase was a significant milestone.
“It provides investors with exposure to a retail format which management expects, based on overseas experience can achieve sales growth in excess of regional and sub-regional shopping centres over the medium term,” he said.
As part of the acquisition, CFX will own the Australian DFO and Homemaker Hub brand names for use in Victoria, NSW, WA and SA. Austexx will have the license to use the brand names in Queensland, Tasmania and the ACT.
CFX announced its intent to reduce vacancies, remix tenants where appropriate, increase tenant interaction, undertake targeted marketing and enhance lease structures in the venues.
The DFO centres offer a retail mix of major and small brands, which usually sell stock from the prior season at a discount price. Brands with stores in the centres include Witchery, Puma, Review, Country Road, Seduce, Portmans and Kathmandu.