David Jones’ iconic Sydney Market Street store sold to Westfield owner Scentre Group

The venerable David Jones menswear store in Market Street, which has been in the group since 1938, has been sold for $360 million and will see apartments built on top of a revamped retail centre.

The long-anticipated sale comes only three days after the owners of the department chain, the South African Woolworths, revealed it was severing its corporate ties with Sydney by relocating head office operations to Melbourne.

David Jones’ iconic Market Street store will be sold to the Scentre group for $360 million.

Scentre Group, the owner of the Westfield Sydney mall and the Melbourne-based super fund Cbus were the buyers. Scentre will redevelop the retail floors to adjoin its mall, while Cbus will develop the air rights into apartments.

In a statement late Monday evening, Scentre’s chief executive Peter Allen said the 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 cent 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 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 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.

“This transaction is a rare opportunity to significantly expand our flagship Westfield Sydney centre'” Mr Allen said.

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 provides 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.

This mixed use project will complement, our soon to commence $1.25 billion development at 447 Collins Street, Melbourne.”

Woolworths put the store on the market last year saying it was part of the review of the department store’s $620 million property, which includes the Elizabeth and Market Street stores in Sydney and two in Melbourne.The Elizabeth Street store will be the flagship site and will undergo a significant upgrade, including a new and expanded food court.It’s expected a sale of a Melbourne store will ensure. The rest of the David Jones stores around the country are leased.The sale agents were Scott Gray-Spencer from CBRE and Simon Fenn from Savills.

Long known to Sydneysiders as David Jones’ “men’s store”, the building houses the famous David Jones food hall as well as menswear, manchester and electrical.