The Canberra Outlet Centre has sold to a German real estate fund for $135.1 million in what's been described as a sign of confidence in the ACT's property sector.
The 44,870 square metre shopping precinct in Fyshwick was purchased by Armada Funds Management on behalf of Deka Immobilien.
The centre services a residential trade area with annual retail expenditure of $8.4 billion, projected to grow at 3.7 per cent a year.
It recently received rezoning approval to add a supermarket.
Vendor Goldman Sachs picked up the debt in the centre in 2013 as part of its larger purchase of a distressed property portfolio from Suncorp Bank.
When offered for sale in October the centre was expected to fetch around $120 million.
The sale represents an initial yield of 6.3 per cent and a fully let yield of 6.7 per cent.
Selling agent Dan McVay said all parties were very pleased with the outcome.
"It's been bought by one of Europe's biggest institutions," he said.
"They love the asset, they are so happy to own it. They're an owner who will keep it up to date and keep it polished; it will be great for Canberra.
"When Goldman Sachs bought it, it was in a fairly sorry state. They've managed it to the point where it now looks very good and there's solid growth in the asset still to come.
"It's such a big property, it's a monster. A lot of the rents are historically not all that high.
"Now the place is full, it's alive again and will generate growth."
Mr McVay said the centre had been "a basket case" several years ago.
"There were vacancies all over the place and people there were struggling," he said.
"They've done a great job of repositioning it."
Mr McVay said the new owner would decide the detail of adding a supermarket.
"It will really be good for the centre," he said.
"There's 12,500 people who work nearby and there's no supermarket. It won't be a big one, less than 1000sqm, I understand."
Real Estate Institute ACT chief executive Ron Bell welcomed the investment.
"It speaks volumes for confidence in the property sector," Mr Bell said.
"The fact it got into so much trouble a little while ago, was I'm sure a real worry for a lot of the tenants and the people working there.
"This puts some strength behind it."
Property Council ACT executive director Adina Cirson said the sale was an encouraging sign that reflected confidence in the sector.
"Forward work schedule expectations are currently the highest in Australia," she said.
"This is teamed with a positive outlook for the Territory's economic and national growth expectations, which continue to rise.
"Canberra has a lot to offer at the moment with opportunities opening up on many fronts."
The managing director of Armada Funds Management, Chris Monaghan, said the acquisition was Deka Immobilien's first in Australia.
"Canberra Outlet Centre is a strong retail asset and the vendor has done a terrific job in repatriating the centre from the challenges it endured as a new development completing and entering the market in the middle of the GFC," Mr Monaghan said.
"We believe we have acquired this at a stage where the centre is stable and well established, but still with room for more tenancy reconfiguration and growth over the next three to five years.
"Our client is extremely happy with this purchase."
The property is anchored by a Harris Scarfe store. It has outlets including JB Hi-Fi, Freedom, Trade Secret, Nike, Kaisercraft and Rivers, and 114 speciality shops.