David Jones $400m Market Street department store for sale

Tuesday 23 February 2016

South Africa's Woolworths Holdings will formally launch a sales campaign for the $400 million David Jones building on Market Street in Sydney. 

The nearly 80-year old iconic building near Pitt Street Mall, is being sold with a three-year leaseback to David Jones.  

The sale was foreshadowed by The Australian Financial Review in October. Buyer interest is expected from domestic and offshore developers given the site's potential to become a hotel or apartment project with high-end retail at the lower levels.

Scentre Group would be another likely bidder given its Westfield Sydney flagship mall is across the road. 

Woolworths Holdings first raised a sale of its CBD property portfolio in Sydney and Melbourne in 2014. At its full-year results last year management said it planned to consolidate into one flagship store in both cities. 

"This sale will allow David Jones to focus on the redevelopment of our adjacent flagship Elizabeth Street store," David Jones chief operating officer, David Thomas, said.

"Our aim is to transform the Elizabeth Street store into the southern hemisphere's leading department store. We believe that having a neighbour with such strong attributes in this vibrant precinct will serve as an added attraction to any potential purchaser and we look forward to progressing the sale process."

Woolworths Holdings chief executive Ian Moir said last week he expected a lot of interest from the Chinese market. 

Some have commented "Subject to the relevant planning approvals, it affords the opportunity to develop a landmark project encompassing a mix of high street-retail, hotel, commercial and/or residential uses".

The site is opposite Pitt Street Mall, which over the last severals years has become home to many well-known international brands such as Zara, H&M, and Uniqlo. The surrounding precinct has also attracted the likes of Dior, Sephora, Christian Louboutin, COS and Rimowa. This will appeal to offshore investors in particular. 

The proximity to Australia's number one high-end retail precinct, Pitt Street Mall, all modes of public transport and harbour, city and park views, will ensure this opportunity will attract global capital, especially from Asia.

The building is on a corner site of 2150 square metres at 77 Market Street. It has large floor plates spread over 10 upper levels, and lower-ground and basement space.

 

Source: The Financial Review - Wednesday 24 February 2016

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