David Jones Bourke St: iconic Melbourne store sell for more than $223m
The David Jones building is heritage-listed.
The David Jones store at the heart of Melbourne’s Bourke St mall has sold in a $223.5m deal that has put the store back in Australian hands for the first time in a decade.
But the retailer will stay on at the address, with an 18-year lease still in place.
Melbourne-based investment group IP Generation has emerged as the buyer of the prominent property, located next to Myer in Melbourne’s best known retail address — the Bourke St mall.
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The South Africa-based Woolworths Holdings acquired the 310 Bourke St site as part of the David Jones business they bought for a then value of about $2.15bn in 2014.
In 2022, they sold their shareholding in the David Jones business to Anchorage Capital Partners for about $100m, but retained ownership of the remaining Bourke St, Melbourne, building.
They also sold the former menswear home of David Jones on the other side of Bourke St for $121m in 2020, with Newmarket Capital collecting the title.
Subsequent plans to develop it into an office block were announced in 2021.
Shoppers make a dash down Bourke Street during busy trading hours.
But it is understood their last remaining Melbourne CBD building changed hands in an off-market sale brokered by JLL for $223.5m to the local investment group.
IP Generation managing director Chris Lock said the property was a Melbourne and Australian icon, and a rare opportunity for an acquisition.
“The gentrification that is occurring around Bourke Street, with the new Melbourne Walk development is further strengthening the precinct, which coincides with David Jones’ major store refurbishment and new luxury tenants opening including Aesop, Louis Vuitton and Gucci,” Mr Lock said.
IP Generation’s other Melbourne assets include the Craigieburn Central shopping centre, the Brand Smart Premium Outlet Centre in Nunawading and the Corio Village plaza in Geelong.
JLL’s Sam Hatcher said the sale was supported by a $38m refurbishment of the property.
Fellow agent Nick Willis said the sale came as Melbourne retail vacancy rates hit a five-year low at 5 per cent, and well ahead of the national average for CBD retail space.
“The transaction marks a significant milestone in the resurgence of CBD retail investments,” Mr Willis said.
Four years ago, Woolworths Holdings also sold the prominent David Jones store site on Elizabeth St, Sydney, for $510m.
Back in Melbourne, the Bourke St mall has had a number of high-profile transactions in the past few years, including Charter Hall selling off its stake in the Myer storefront to the Abacus Group last year for $73.2m. The remainder of the building is owned by Vicinity Centres.
The Myer family sold their stake in the property in 2016.
1997: The David Jones building in Bourke Street, Melbourne has been an icon of the street for decades.
In 2018, the 274-278 Bourke St store that then hosted Swarovski and Windsor Smith was sold for north of $40m in its first transaction in 60 years.
Woolworths Holdings have been approached for comment.
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