CBUS and Scentre team up to secure David Jones Sydney store
Scentre Group, jointly with Cbus Property, has purchased the David Jones Market Street building in Sydney’s CBD for $360 million.
David Jones owner, South Africa’s Woolworths Holdings had the property offered through real-estate agents Simon Fenn of Savills, inconjunction with CBRE, with the Lowy-family backed Scentre always keen to expand its retail prescence.
Property tycoon Frank Lowy, ahead of resigning from Scentre in May, is understood to have played a major role.
David Jones will use the sale proceeds to help back the redevelopment of its adjacent flagship Elizabeth Street store.
The Scentre group’s share of the purchase price is $182.5 million with Cbus Property paying the balance of $177.5 million.
David Jones will continue to occupy the site until late 2019 under a lease agreement providing a 4.5% per annum rental return on the acquisition price.
During the leaseback period, the co-owners will obtain the necessary approvals to redevelop the site when David Jones vacates the building.
On completion, the redeveloped 77 Market Street site will comprise approximately 10,000 square metres of luxury retail space integrated with Westfield Sydney.
In addition Cbus Property will convert the balance of the existing building to provide quality office space and develop a luxury residential tower above, overlooking Hyde Park.
Scentre Group will own, develop, design and build the retail elements of the site.
Scentre Group CEO Peter Allen said the transaction was a rare opportunity to significantly expand our flagship Westfield Sydney centre.
The 77 Market Street site will provide the opportunity for further luxury retail and high-quality food, which combined with our existing Westfield Sydney and David Jones’ planned $200 million investment into the adjacent Elizabeth Street store, will reinforce the precinct as Sydney’s pre-eminent luxury retail destination.”
Adrian Pozzo, Cbus Property CEO said 77 Market Street provided another excellent opportunity for Cbus Property to demonstrate its core capabilities in residential and commercial development in what will be a vibrant mixed use building in an exciting location with unrivalled amenity.