A story of Sydney’s irreplaceable street corner

If the walls of the David Jones building on Sydney’s famous Elizabeth Street could talk, they might boast of the competition to buy them, a rarity in the world of physical retail these days

Fighting off competitors as such as Shaun Bonett’s Precision Group, Sydney investment house AsheMorgan and shopping center landlord Scentre Group, Australia’s largest institutional landlord Charter Hall won the bidding to buy the 12-story property overlooking the city’s Hyde Park and Sydney Harbor at the end of December 

The winning firm’s managing director, David Harrison, was chuffed at the victory to buy the recently redeveloped store. He told the Australian Financial Review“You can’t replace the corners of Elizabeth and Market and Castlereagh street. That’s the way I look at it.” 

“You’ve got a three-street frontage with knockout views of Hyde Park and the Sydney Harbour. With the Elizabeth Street frontage, you can never be built out. That’s super-prime.”  

Charter Hall agreed to acquire the store for A$510 million ($393 million; €315million) from Cape Town-based clothing retailer Woolworths Holdings. The capital is coming from Charter Hall’s Long WALE REIT, its private value-add Deep Value Property Fund and its balance sheet.   

The purchase, subject to Australia’s Foreign Investment Review Board, is taking the form of a sale and leaseback transaction in which the department store David Jones enters a 20-year lease 

The deal reflects a 5 percent initial yield based on an initial annual net rent of A$25.5 million. Structured as a triple-net leaseit also sees Charter Hall benefit from a minimum 2.5 percent per annum annual rent increases supplemented by an agreed turnover rent linked to sales performance.   

Such a conservatively structured transaction is rare for a property market which has all but turned its back on physical retail assets.   

For super-prime assets, on the other hand, the rules are different, Harrison told the AFR“We think CBD department stores will long outlive suburban department storesThey are the flagships. 

I look at the real estate and I just think it’s extremely attractive buying.” 


1927 David Jones introduces a flagship department store on Elizabeth Street

1947 The store hosted designer Dior’s first fashion show outside Paris

1954 Queen Elizabeth II visits the Great Restaurant on the 7th Floor of David Jones Elizabeth Street

2018 David Jones starts a redevelopment plan

2020 April The redeveloped store opens to the public

2020 December Charter Hall buys the property from Woolworths Holdings for A$510 million