The Market St tenancy houses David Jones’ Food Hall, and was sold for $360 million. Scentre’s share of the purchase price is $182.5 million with Cbus Property paying the balance of $177.5 million.
David Jones will continue to occupy the site until late 2019 under a lease agreement providing a 4.5 percent per annum rental return on the acquisition price.
During the leaseback period, the co-owners will obtain the necessary approvals to redevelop the site when David Jones vacates the building.
On completion, the redeveloped 77 Market St site will comprise approximately 10,000sqm of luxury retail space integrated with Westfield Sydney.
In addition Cbus Property will convert the balance of the existing building to provide quality office space and develop a luxury residential tower above, overlooking Hyde Park.
Scentre Group will own, develop, design and build the retail elements of the site.
Scentre Group CEO, Peter Allen, said the transaction is a rare opportunity to significantly expand the flagship Westfield Sydney centre.
“The 77 Market St 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 St store, will reinforce the precinct as Sydney’s pre-eminent luxury retail destination.”
Adrian Pozzo, Cbus Property CEO said: “77 Market St provides another excellent opportunity for Cbus Property to demonstrate its core capabilities in residential and commercial development in what will be a vibrant mixed use building in an exciting location with unrivalled amenity. This mixed use project will complement, our soon to commence $1.25 billion development at 447 Collins St, Melbourne.”