David Jones to vacate Market Street Sydney store in 2019 after $360 million sale

Scentre’s redevelopment plan includes about 10,000 square metres of retail space that will be integrated with its adjacent Westfield Sydney complex.

Under a lease agreement for the next three years, David Jones will provide a 4.5 per cent per annum rental return on the acquisition price. Scentre’s share of the purchase price is $182.5 million and Cbus Property has paid the balance of $177.5 million.

During the leaseback phase, approvals would be sought to redevelop the site.

The deal comes days after David Jones’ owner, South African company Woolworths, revealed a plan to relocate its headquarters to Melbourne, declaring the city Australia’s fashion and retail capital.

Scentre Group chief Peter Allen said the transaction was a rare opportunity to expand the group’s flagship Westfield Sydney shopping centre.

“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,” Mr Allen said.

Scentre will develop, design and build the retail component of the site. Cbus would convert the remainder of the Market Street building to office space and develop the luxury residential tower above overlooking Hyde Park.

Cbus Property chief Adrian Pozzo said the Market Street site provided an opportunity for the company to demonstrate its core capabilities in residential and commercial development.