Property firm Charter Hall has finalised its purchase of David Jones’ prized 12-storey Elizabeth Street flagship store for $510 million.

The firm acquired the site on a sale and leaseback transaction with David Jones, which guarantees the department store can operate on-site for the next 20 years on a minimum annual rent increase of 2.5 per cent, supplemented by an agreed turnover rent linked to the business’ sales performance.

Charter Hall CEO David Harrison said the acquisition is consistent with the business’ strategy of securing long lease assets, and expects Charter Hall’s funds under management to exceed $45 billion by the end of this year.

David Jones recently completed a $200 million refurbishment of the site, which had an ongoing impact on the business’ bottom line of the last few years, but returned the business to its place as “the grand old dame of luxury retail” according to former-CEO Ian Moir.

Moir was recently replaced by Scott Fyfe, who stepped up from the position of Country Road’s CEO to head up the combined group.

“David Jones is one of Australia’s most iconic retail brands and is backed by an exceptionally strong culture of commitment to quality and style,” Fyfe said.

“I look forward to leading the team and working with our many partners as we focus on the changing behaviors of our customers and delivering products and experiences for the future.”