Theatre king David Marriner sells Chanel building for $75m
Melbourne theatre king and renowned developer David Marriner has secured a blockbuster retail property deal in the city’s luxury shopping precinct after selling the flagship premises of fashion giant Chanel for more than 10 times what he paid for it over a decade ago.
Property records show Mr Marriner’s JK&D Developments sold the six-level 1920s building at 42 Russell Street (next door to the Grand Hyatt) for $75 million to Chanel’s ultra-wealthy owners, the Wertheimer family. Mr Marriner paid just $7.4 million for it in late 2009.
The highly confidential deal was struck in October and settled just before Christmas.
The acquisition by the Wertheimers’ Mousse Investments, which owns Chanel, the parent company of the famous Parisian fashion house founded by Coco Chanel, is the second big property deal on the pocket of Russell Street between Collins Street and Flinders Lane by a major fashion label owner.
In September, global luxury brands giant LVMH acquired the former Ivy building across the road from Chanel at 145-149 Flinders Lane for $39 million with plans to open a flagship Christian Dior store in the 1901-built Beaux-Arts-style building.
Both luxury property deals will fuel confidence in the Melbourne CBD and come as investors’ appetite for retail property rises.
According to commercial real estate firm Colliers, retail assets worth $916 million traded in the March quarter, more than the $726 million of office transactions (both CBD and metro) and $370 million of industrial transactions. This followed $2.73 billion of retail sales in the December quarter.
Mr Marriner is founder of the Marriner Group, which operates five major theatres in the CBD, and also a veteran developer. He secured Chanel as the anchor tenant at 42 Russell Street in 2014 after he added two floors to the original four-storey property, which was built in 1923 for the Royal Bank of Australia.
This move pioneered the establishment of Russell Street – between Collins Street and Flinders Lane – as a luxury shopping hub. The pocket is now home to a plethora of fashion brands including Luis Vuitton, Gucci, LVMH-owned Loewe and most recently another LVMH brand, high-end jeweller FRED.
It is understood the original leasing deal with Chanel included a promise that Mr Marriner would give the Wertheimers first option to buy the Russell Street building if he decided to sell it.
Mr Marriner declined to comment on the deal when contacted by The Australian Financial Review.
Parisian businessman Pierre Wertheimer cofounded Chanel with Coco Chanel in the 1920s. The fashion house is best known for its No.5 perfume and women’s suits.
The Wertheimers, who are Jewish, were forced to flee Paris for New York in 1940 after France was invaded by the Nazis. Coco Chanel, a Nazi sympathiser and informant, tried to oust the Wertheimers from Chanel using Hitler’s Aryan Race laws, but was outsmarted by them.
Wertheimers stay the course
Chanel is now controlled by Pierre Wertheimer’s grandsons, Gerard and Alain, who ranked joint 39th richest globally on the Forbes Billionaires list with fortunes of $US37.1 billion ($56.9 billion) each.
The Australian Financial Review sought comment from the Wertheimers and Mousse Investments, which has offices in New York and the Cayman Islands.
Designed by architect Peter Marino in the grand modern Italian palazzo style, 42 Russell Street was built for about £13,000. It was used as a bank from 1923 until 1979. In 1980 it was bought by the Church of Scientology for $720,000 and then acquired by Mr Marriner for $7.4 million in November 2009.
Luxury retail deals struck on Collins Street over the past 12 months include watchmaker Grand Seiko, which is busy fitting out a store at The Block Arcade, and shoe designer Jimmy Choo, which opened a boutique last year at 100 Collins Street.
