This week Italian fashion chain Gruppo Nico will open on the first floor anchoring that space with a 1,500sq m flagship store, the Art House pub will open in a few weeks and another major anchor tenant is poised to lease 2,500sq m on the floor above. "People forget that the QVB did not bed down for a year and a half and it opened at the beginning of an economic upswing," he said. Mr San does not argue with the valuation but says that over time Galeries Victoria will reach its potential. CB Richard Ellis would have been forced to take a very conservative view on the building's income and then capitalise that figure on a very soft yield. Some 20 per cent of the space is still unleased and many existing tenants are on rent rebates. Ipoh's managing director, Mr Bertie San, said that at this point of time Galeries Victoria was "an immature retail asset and the valuation reflected the immature income stream". The project a four-level 15,000 square metre shopping centre underneath the Citigroup Centre and across George Street from the Queen Victoria Building has struggled since opening a year ago. The flagship Queen Victoria Building is $30.1 million ahead of its book value, but that growth has been more than outweighed by declines in value on the Leigh Street project in Adelaide, the Old Bank Arcade redevelopment in Wellington, the Exchange project in the Chinese city of Tianjin and worst of all, Galeries Victoria.
All eight of Ipoh's major assets have been revalued for the statement and the total figure $563.83 million falls 5 per cent short of book value. The valuation, by CB Richard Ellis, is contained in Ipoh's Target Statement, released this week in response to the $260 million takeover bid for the company by the Singapore Government Investment Corporation. Galeries Victoria, the new Sydney CBD shopping centre which cost Ipoh Ltd $143.9 million to develop, is now valued at just $86.5 million.
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