Newmark Capital has finalised its acquisition of the historic David Jones menswear store on Bourke Street Mall for $121m.
David Jones will remain in occupation on a short term leaseback of three years, while they redevelop their 310 Bourke Street store to create a premium flagship experience. Newmark hope to refurbish the building and secure an international retailer when the department store vacates at the end of its lease.
CBRE managed the sale process which kicked off in November last year attracting over 140 enquiries and 15 bids received from a cross section of domestic, offshore, HNW, syndicate investors and developers. The final deal reflects a 20% discount to the $150m price tag David Jones had hoped to achieve for the site.
The historic building sits on a 2,247sqm site and offers 11,814sqm of GLA over 8 levels, including 5,810sqm of retail space on the lower ground, ground and mezzanine levels.
David Jones CEO Ian Moir said the successful transaction of 299 Bourke Street and the pending redevelopment of 310 Bourke Street represented a significant milestone in David Jones’ flagship strategy.
Mr Moir said; “The divestment of 299 Bourke Street Mall will allow us to focus on the optimisation of our larger 310 Bourke Street store and deliver a more cohesive and elevated single store experience in Melbourne’s CBD while simultaneously paying down debt as part of our ongoing debt reduction strategy. The redeveloped 310 Bourke Street, will be specially curated for our Melbourne customers with an emphasis on premium luxury and lifestyle brands across each of our categories.”
Also this week, Vantage Property Investments were reported to be in due diligence to acquire the St Collins Lane mall from JPMorgan Asset Management for less than half the $247 million the Group paid in 2016. JP Morgan acquired the project from LaSalle Investment Management following a $30m refurbishment, however since opening in 2016 the mall has struggled with high vacancy rates across its four levels – especially on the first floor and upper floor food court. The introduction of UK department store Debenhams in 2017 and closed in early 2019 hasn't helped the struggling mall.
With a second wave of COVID19 now impacting the state, the Melbourne CBD will take some time to recover.
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