Local and international investors are expected to queue up as David Jones prepares to drop the flag on the sale of its famous Market St building in Sydney.
The Australian retail giant will next month launch an international sale campaign for the iconic building at 77 Market St, which has stood at the at the intersection of Castlereagh St since 1938.
Set on a 2150sqm site, the building is spread over 10 above-ground levels, in addition to lower ground and basement levels, and is renowned for its corner curve and sandstone heritage facade.
Yields dive: Retail property to remain flavour of the month
The building’s future as a menswear destination is now unclear, with potential buyers to consider a range of options for the prime site, including continuing its status as a retail hub, redeveloping it into a hotel, transforming it into a residential precinct or a combination of all three.
Any proposed changes would be subject to planning approval.
David Jones chief operating officer David Thomas says the sale will allow the retailer to pour its attention into its flagship Elizabeth St store.
There is no doubt that this iconic asset will attract interest from all corners of the globe
“Our aim is transform the Elizabeth St store into the Southern Hemisphere’s leading department store,” Thomas says.
“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.”
CBRE’s Scott Gray-Spencer, Josh Cullen and Rick Butler and Savills’ Simon Fenn, Ian Hetherington and Ben Azar will steer the campaign.
Gray-Spencer says there were numerous options for potential investors to consider as they ponder the site’s future.
“This is a one-of-a kind offering, providing an opportunity for a developer to secure a highly significant land holding in Australia’s most vibrant retail precinct,” he says.
We believe that having a neighbour with such strong attributes in this vibrant precinct will serve as an added attraction to any potential purchaser
“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.”
Fenn, Savills’ NSW managing director, says he expects Asian buyers to emerge in force.
“There is no doubt that this iconic asset will attract interest from all corners of the globe,” he says.
“The proximity to Australia’s number one high end retail precinct, Pitt St Mall, all modes of public transport and harbour, city and park views will ensure this opportunity will attract global capital, especially from Asia.”
The upcoming sale comes after a JLL report revealed overwhelming investor interest in retail assets would see yields reach the bottom of their cycle in 2016.
The report predicted a fifth consecutive record year of retail property sales, with $8.4 billion sold last year, trumping 2014 high watermark by $900 million.