Direct Factory Outlet

Direct Factory Outlet (DFO) is a group of factory outlet shopping centres in Australia. They are large-floor warehouse buildings containing partitioned stores where retail outlets sell excess or previous seasons' stocks at reduced prices.

Direct Factory Outlet Australia Pty Ltd
DFO
TypePrivate
Industry
Founded1997 (1997)[1]
Headquarters
Australia
Area served
Australia
OwnerVicinity Centres
WebsiteOfficial website

Business model

The Direct Factory Outlet retail chain is owned by the privately owned Austexx Group, led by David Goldberger and David Weiland with their first centre opened at Moorabbin Airport (Cheltenham) in 1997.[2] Former Australian Competition & Consumer Commission chief Graeme Samuel holds a $50 million interest in Austexx through a blind trust.[3] Valued at A$1.5 billion, in early 2010 the business was put up for sale with a number of retail investment funds expressing interest.[4]

DFO centres have traditionally been located around airports: a side effect of the Airports Act of 1996, the Commonwealth Government has planning control over the land, meaning state planning legislation can be bypassed by developers.[5] In addition the property developer is able to exploit the cost difference between retail and industrial rents, gives outlet centre operators a distinct advantage over traditional shopping centres. A survey by Melbourne newspaper The Age in 2007 found that in all three DFO-owned centres, most shops carried at least some full-price, current-season stock, available at normal shopping centres.[6] By 2008 five legal challenges to DFO developments have been made by competing retail developers and the Shopping Centre Council of Australia, all being unsuccessful.[5]

On 16 August 2010, lead bank Suncorp-Metway, along with St George Bank, National Australia Bank and Lloyds Banking Group, issued a notice to parent company Austexx demanding repayment within 24 hours of the A$450 million they are owed.[7] The South Wharf centre was under an A$500 million debt, with work on completing the centre stopped after workers placed bans over non-payment. Parent company Austexx is understood to have total debts of A$1.2 billion, with the four relatively successful DFO sites used as cross-collateral for bank-funded expansion into five other less successful locations (Canberra, Cairns and Hobart). The group of banks appointed insolvency specialists KordaMentha as advisers, with the entire group facing receivership.[8] Negotiations continued until a deal was struck on Thursday 19 August, the four banks extending their funding to allow the South Wharf development to be completed. The ten DFO shopping complexes will then be sold off separately to repay the $1 billion owed to the banks.[3] The banks hope to recoup most or all of the money they are owed by avoiding a 'fire sale' of assets, but neither Austexx founders or other investors are expected to be repaid until the bank debts are settled.[3]

Locations

As of March 2022, there are seven shopping centres located in four states of Australia. Unless stated otherwise below, they are owned entirely by Vicinity Centres.[9]

DFO Brisbane at Brisbane Airport in 2013.
  1. DFO Brisbane is situated at Brisbane Airport about 13 kilometres (8.1 mi) north-east of the Brisbane central business district that opened in 2005.[9]: 28  As of December 2021, it has 144 tenants on 26,020 square metres (280,100 sq ft) of gross lettable area (GLA).[9]: 28 
  2. DFO Essendon is in the Melbourne suburb of Essendon Fields, approximately 11 kilometres (6.8 mi) north of the Melbourne central business district. It opened in October 2005.
  3. DFO Homebush is located in Homebush, about 14 kilometres (8.7 mi) west of the Sydney central business district.
  4. DFO Moorabbin is in Cheltenham, about 20 kilometres (12 mi) south-east of the Melbourne central business district. Originally Fairways Leisure Market, the centre opened in 1992 on land adjacent to Moorabbin Airport. In 1997 the centre was purchased by the Austexx Group as the group's first DFO shopping centre.[10] The centre had approximately 45 stores on 8,000 square metres (86,000 sq ft).[1] Since opening, the centre has expanded to 24,715 square metres (266,030 sq ft).
  5. DFO Perth is situated at Perth Airport, approximately 12 kilometres (7.5 mi) east of the Perth central business district.[11] The shopping centre opened on 3 October 2018 with 113 retail outlets and 1500 parking bays.[12] As of December 2021, it is 50% co-owned with Perth Airport Development Group Investments, and has 111 tenants on 23,729 square metres (255,420 sq ft) of GLA.[9]: 71 
  6. DFO South Wharf is located in the Melbourne suburb of South Wharf, about 2 kilometres (1.2 mi) south-west of the Melbourne central business district.
  7. DFO Uni Hill is in Bundoora, a Melbourne suburb approximately 16 kilometres (9.9 mi) north-east of the Melbourne central business district.

Essendon Centre plane crash
Main article: 2017 Essendon Airport Beechcraft King Air crash

Just before 9am on 21 February 2017, a Beechcraft Super King Air on a passenger charter flight bound for King Island, Tasmania crashed shortly after takeoff from nearby Essendon Airport. All five people aboard the flight were killed. As the shopping centre had not opened yet, only staff were at the centre, all of whom were accounted for. The incident was the worst aviation accident in Victoria for 30 years.

See also

References
  1. Khadem, Nassim (2 May 2004). "Centres feel left out of discount boom". The Age. Retrieved 29 October 2012.
  2. Pallisco, Marc (9 February 2010). "Ownership of 1.5 Billion DFO Retail Chain to Change". realestatesource.com.au. Retrieved 10 May 2010.
  3. Bachelard, Michael (22 August 2010). "DFO carve-up to pay banks". The Age. Melbourne: Nine Group. Retrieved 15 March 2022.
  4. Cummins, Carolyn (26 April 2010). "DFO sale signals trusts are finally turning corner". Sydney Morning Herald. Retrieved 10 May 2010.
  5. "Factory outlet centres go from strength to strength". Inside Retailing. 21 April 2008. Archived from the original on 8 December 2009. Retrieved 10 May 2010.
  6. "Direct factory outrage". The Age. Melbourne. 31 October 2007. Archived from the original on 28 October 2007. Retrieved 10 May 2010.
  7. Gluyas, Richard (18 August 2010). "Last-ditch effort to save DFO shopping empire". The Australian. The Australian. Retrieved 18 August 2010.
  8. Dunlevy, Maurice (17 August 2010). "Melbourne DFO faces receivership with $500m debt". Herald Sun. Herald Sun. Retrieved 18 August 2010.
  9. Direct Portfolio Property Book (PDF) (Report). Vicinity Centres. December 2021. Archived (PDF) from the original on 17 February 2022. Retrieved 16 March 2022.
  10. Pallisco, Marc (9 February 2010). "Ownership of 1.5 Billion DFO Retail Chain to Change". realestatesource.com.au. Retrieved 30 May 2011.
  11. "Direct Factory Outlet (DFO Perth)". Georgiou. 2022. Retrieved 15 March 2022.
  12. Paddenburg, Trevor (2 October 2018). "Perth's new DFO: What you need to know about opening day". PerthNow. Retrieved 15 March 2022.
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