Charter Hall pays $510m for Sydney CBD David Jones

Woolworths confirmed in October that Charter Hall was the preferred bidder for 86-108 Castlereagh Street.

Charter Hall is paying $510 million for Sydney’s David Jones store.

Vendor, South Africa’s Woolworths Holdings Limited, confirmed the institution was the preferred bidder in October.

The 3530 square metre site with three street frontages (marked), opposite Hyde Park.

Contracts for the 12-level complex at 86-108 Castlereagh Street exchanged today.

It will be held 50pc by the Charter Hall Long WALE REIT (CLW), and a quarter each by Charter Hall DVP partnership and the parent (Group).

AsheMorgan, Shaun Bonett’s Precision Group and SCentre are speculated to have contested for the asset.

David Jones’ “Elizabeth Street” store

The 3530 square metre site also has frontage to Elizabeth and Market streets.

The retail space – with c2920 sqm floorplates – has natural light to three sides; parts of the building enjoy Hyde Park and Sydney Harbour views (story continues below).

David Jones completed a 16 month, c$200m renovation, late last year.

It offered the asset with a 20-year Triple Net leaseback at a starting annual fee of $25.5m (or $800 per sqm of lettable area) with fixed 2.5pc increases.

Turnover rent is also payable.

The sale price reflects a five per cent initial yield.

Charter Hall Group chief executive officer and managing director David Harrison said, adding the end-value of pre-leased projects within its development pipeline, it manages a property portfolio worth $45 billion.

Earlier this month CLW paid $281.5m for a Pitt St property on 1507 sqm with a 10-year Telstra leaseback.

The vendor completed a c$200m renovation of the Sydney store late last year.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of