Major players eye off 77 Market Street
It’s being billed as one of the most unique development opportunities ever offered in Australia. And, by all accounts, it’s attracting plenty of interest.
David Jones’ owner, Woolworths Holdings of South Africa, is selling its iconic 77 Market Street building in central Sydney and has appointed CBRE and Savills to market the sought after property.
Last week, Simon Fenn, NSW managing director of Savills Australia, told Inside Retail Weekly that, “Representatives from agencies are currently travelling around Asia and we have had very strong interest locally, in Asia and Europe”.
“We have received significant interest from a variety of buyers, ranging from international investors to local developers,” added, Scott Gray-Spencer, executive managing director of CBRE Australia.
“This building is a historic landmark and is perfectly positioned in one of the most sought after locations in Sydney. There is substantial momentum gaining around this campaign with quite a diversified group of interested parties.”
Also known to be looking at the landmark 2150 square metre building is Westfield owner Scentre Group, which has its head office and flagship Sydney Westfield shopping centre just across the road.
Scentre Group CEO, Peter Allen, recently confirmed his interest in the Market Street property to BusinessDay.
“Given we are owners of the adjoining, high performing, Westfield Sydney, we would be an interested party in any sale of the David Jones stores,” he said. “We look at any opportunity to expand our footprint.”
So what makes this a very special building to sell?
“It’s a truly unique, large, northeast facing corner site right in the heart of the Sydney CBD with views over Hyde Park and Sydney Harbour,” said Fenn.
“It gives the purchaser the opportunity to develop a high quality, mixed use site in a precinct where there is a lot of positive change. The building will be sold on a leaseback with David Jones’ covenant for a minimum of three years and the guarantee of it reinvesting in the immediate area with a significant upgrade of its Elizabeth Street store.”
The new 77 Market St
Gray-Spencer added that, subject to the relevant planning approvals, the building, which is spread over 10 floors (plus lower-ground basement and sub-basement), could be redeveloped to encompass a mix of high street retail, hotel, commercial and residential uses.
The combined residential, worker and tourism trade population in this precinct has a current expenditure of $50.2 billion a year, and this is forecast to grow to $83.6 billion a year by 2026 on the back of strong growth in both the residential trade population and the CBD employment base.
David Jones chief operating officer, David Thomas, said the sale of the building would allow David Jones to focus on the redevelopment of its adjacent flagship Elizabeth Street store.
“Our aim is transform the Elizabeth Street store into the Southern Hemisphere’s leading department store,” he added.
“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.”
When contacted by Inside Retail Weekly, David Jones declined to comment any further on the building’s sale and its future plans.
History of 77 Market St
Completed in 1938 to mark David Jones’ 100th anniversary, the building is characterised by its sandstone heritage façade and signature corner curve, emphasising its inter-war, functionalist design. It was opened by then Prime Minister William ‘Billy’ Hughes, but soon afterwards, the Second World War broke out and it became occupied by the Ministry of Munitions.
Despite its age and heritage, the building was not David Jones’ first store on Market Street. It is diagonally opposite the Elizabeth Street store, which opened in 1927 and remains the group’s flagship store to this day.
However, many believed the planning of the Elizabeth Street store to be pure madness at the time, as the location was considered remote from the city’s retail centre. Nonetheless, the Elizabeth Street store single-handedly moved the hub of Sydney’s retailing to Hyde Park.
David Jones is not only Australia’s oldest department store, but also the oldest department store in the world still trading under its original name.
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