David Jones' Market Street building in Sydney has sold for $360 million.
The building has gone under the hammer to Scentre Group, operater of Westfield Australia, and Cbus Property.
The Group’s share of the purchase price is $182.5 million, with Cbus Property paying the balance of $177.5 million.
David Jones will continue to occupy the site until late 2019 under a lease agreement providing a 4.5% per annum rental return on the acquisition price.
During the leaseback period, the co-owners will obtain the necessary approvals to redevelop the site when David Jones vacates the building.
On completion, the redeveloped 77 Market Street site will comprise approximately 10,000 square metres of luxury retail space integrated with Westfield Sydney.
In addition, Cbus Property will convert the balance of the existing building to provide office space and develop a luxury residential tower above, overlooking Hyde Park.
Scentre Group will own, develop, design and build the retail elements of the site.
Scentre Group CEO Peter Allen praised the sale.
"This transaction is a rare opportunity to significantly expand our flagship Westfield Sydney centre.
"The 77 Market Street site will provide the opportunity for further luxury retail and high-quality food, which combined with our existing Westfield Sydney and David Jones’ planned $200 million investment into the adjacent Elizabeth Street store, will reinforce the precinct as Sydney’s pre-eminent luxury retail destination."