This article is from the Australian Property Journal archive
DAVID Jones has leased two office buildings in Richmond totalling 23,156 sqm as part the company’s plan to move 600 people from its Sydney headquarters to Melbourne.
The retailer has entered into two new leases with Country Road Group over Buildings 1 and 2 at 572-576 Swan St Richmond, comprising 23,156 sqm. The properties are owned by the ASX-listed Growthpoint Properties Australia, which is also backed by major interests in South Africa.
David Jones has signed a 14.5-year lease until 30 June 2032 and will move in from 1 July 2017 and 1 April 2018.
David Jones’ parent company, the Johannesburg Stock Exchange-listed Woolworths Holdings (WHL), will relocate 600 staff from its Sydney offices to Melbourne. Following completion there will be approximately 600 David Jones employees and 680 Country Road Group employees, which in time will increase to 1500 employees.
The head office relocation is part of WHL’s strategy to also redevelop its properties in Market St and Elizabeth St.
With the sale of its Market St property progressing well, with Cbus Property tipped to be the front runner, the company declared its intent to spend up to $200 million on the redevelopment of the iconic Elizabeth St store, creating a 39,000 sqm luxury department store spanning 11 levels. The redevelopment will commence in the second half of 2017 with completion expected in the second half of 2019.
Meanwhile WHL chief executive Ian Moir said Melbourne was selected following an evaluation of the local retail industry, long term costs, development opportunities, talent pool, and proximity to other WHL assets including the group’s distribution assets at Truganina.
“A campus location in the heart of the region’s fashion and retail capital will provide a unified sense of purpose that will foster a new level of co-operation and creative collaboration.
“This exercise is not about reducing headcount and saving employment costs. Not only will the current complement of David Jones staff remain the same, it will grow in future as the business expands,” he added.
WHL expects the move to Melbourne will save the company $10 million per annum from 2019. The Victorian government has also provided WHL with a range of incentives to offset the cost of the re-location.
572-576 Swan St Richmond, Victoria forms part of the Botanicca Corporate Park comprising eight buildings.
Growthpoint head of property Michael Green said both companies have a strong relationship in South Africa, where WHL leases significant retail space from Growthpoint Properties Limited of South Africa.
“It is pleasing to extend this relationship into the Australian market at the Botanicca Corporate Park,” he said.
JLL and Colliers were appointed leasing agents for this transaction and introduced Country Road to Growthpoint.
Managing director, Timothy Collyer, said Country Road Group and David Jones join Growthpoint’s high quality office tenant list which includes Australian Commonwealth and State governments, Jacobs and ANZ Bank.
“We are also delighted to have extended our lease with long-standing tenant Willow Ware Australia in our industrial portfolio. Growthpoint is in advanced stages of negotiations in relation to other leasing transactions and hopes to be in a position to make further announcements soon.” Collyer concluded.
Australian Property Journal
