Newmark fills ex-David Jones store, floats first fund

Mecca will move into the ground and first floor of David Jones’ outgoing menswear store, on the Bourke Street Mall.

The cosmetics retailer has signed for the 3000 square metres – making it 50 per cent bigger than the flagship Sydney branch which opened a year ago.

It is five times larger than the group’s Highpoint tenancy – the group’s second busiest national outlet.

Mecca opened its first Australian store in Toorak Road, South Yarra, in 1997.

Newmark repositioning on track

The Mecca lease is a boon for the landlord, Newmark Capital, which paid David Jones $121 million for the seven storey, 11,814 square metre property at 299 Bourke St last year with imminent vacant possession.

Earlier this year, the group unveiled plans to convert the upper five storeys, formerly used for storage, into loft style offices – a component which would bear the address 280 Little Collins St.

The basement, covering almost all of the 2232 square metre block, would be refit for a supermarket.

Between 1883-1929, the building accommodated the Coles Book Arcade – and after, until 1986, traded as a Coles variety store.

“After 24 years of opening stores across Australia and New Zealand, our flagships are the culmination of the past, present and future of Mecca as a business,” founder and co-chief executive officer Jo Horgan said.

“We have a vision to create the world’s most extraordinary, innovative and loved experiential retail destination where people can immerse themselves in the absolute best in global beauty,” she added.

The executive is promising “a beauty wonderland of never before seen experiences, edutainment and inspiration”.

More than 200 brands are expected to be stocked there.

“The retail store experience remains at the heart of Mecca’s business and there’s an ambitious pipeline of new stores over coming years,” according to Ms Horgan (story continues below).

Mecca opened its first Northern Territory outlet, in Darwin, on Friday – giving it a presence in every Australian state and territory.

Newmark fund floats

News of the Mecca lease comes the day Newmark floated its first investment vehicle – stocked with eight large format retail investments, seven fully occupied by Bunnings which contributes to 75.8pc of the income.

Newmark Property REIT, which uses the ASX moniker NPR, closed at $1.92 per unit – up two cents on its initial public offer price.

Valued at a total of $519.6m on a blended capitalisation rate of 5.07pc, the portfolio contains 153,649 sqm of gross lettable area and carries a Weighted Average Lease Expiry of 7.8 years.

The fund is an amalgamation of two entities – the Chadstone Trust, which held the $80m Chadstone Homeplus+Homemaker Centre (in which Bunnings is a major tenant), and the Newmark Hardware Trust.

NPR’s priciest asset is a Preston hardware store which the manager acquired for c$85m in February.

Other outlets are at Eastgardens (worth $77m), Maroochydore ($71m), Launceston ($55.8m), Warragul ($57m), Lake Haven ($50m) and Melton ($43.6m).

Newmark, co-founded by Simon Morris and ex-Hawthorn footballer Chris Langford, retains c18.2pc of NPR.

The float comes a month after Real Asset Management offered its first vehicle – the healthcare focused RAM Essential Services Property Fund (REP) – its unit price closed today at $1, five cents lower than its launch price.

Last week, we reported non-bank lender Qualitas was seeking to raise $335m ahead of being listed.

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Marc Pallisco

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