Outgoing Cartier flagship store sold

The 17 level ‘Cartier building’ was developed on a site once owned by Christopher Skase.

Charter Hall and Wyllie Group, on behalf of a fund for wholesale investors in which they will each hold a minority interest, is acquiring a central Sydney office set to be vacated by the tenant which makes it famous.

The Hour Glass, which holds the Cartier brand, recently purchased a Collins Street, Melbourne, strata space.

The Cartier flagship store, as it will be known until early next year, is speculated to be trading for c$160 million – $10m over the guide when it was listed in April, before six interest rate rises.

The Castlereagh Street property (marked) has development upside.

Developed in 1991 at 74 Castlereagh Street, it contains 5475 square metres of lettable area of which 23 per cent (1265 sqm) is retail – in the basement and on the ground, mezzanine and first floor.

Over 17 levels, it replaced a double storey, c940 sqm office formerly occupied by Hardy Bros, owned in the 1980s by Christopher Skase’s Qintex Australia.

The seller this time around was a private family office, Country State Development Pty Ltd.

Colliers’ Vince Kernahan, James Girvan and Callum Cooke were the agents.

Their deal comes two years since Charter Hall paid Telstra $281.5m for a 15 level exchange on 1507 sqm at 76-78 Pitt St, a couple of hundred metres from the outgoing Cartier store.

Easy sell-down

The Castlereagh St site spreads 557 sqm.

With each floor being serviced by three lifts and having full security, column free space, toilets, a shower and kitchen – the building was marketed for its straightforward potential to be subdivided and sold down.

About 6395 sqm could be offered that way, the agents said (story continues below).

The foyer at 74 Castlereagh Street was renovated in 2016.

Most levels receive light from three sides, while the average floorplate is 350 sqm, they added.

A renovation to the foyer and façade was also completed between 2016-2018.

Instead, the incoming owners are expected to reposition it – focusing on the commercial space.

A replacement would likely be sought for the 783 sqm Cartier tenancy, which expires next year; the retailer is moving to The Pavilion at nearby 388 George St, on the north east corner of King.

The landlords could then retain it – as an investment, it could also slot into a Charter Hall managed fund. The property offers development upside too.

Other high-end retailers in the pocket include Chanel, Dior, Ermenegildo Zegna, Hemmes and Gucci.

The David Jones Elizabeth Street store – which Charter Hall bought with a leaseback in late 2020 – is also close.

Wyllie is Perth based.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.