This article is from the Australian Property Journal archive
TWO of Melbourne's most powerful retail families, Gandel and Myer, have joined fortunes to buyback the Melbourne Myer emporium for $600 million together with CFS Retail Property Trust and the Singapore Government's GIC Real Estate.
The John Gandel controlled, Gandel Group – half owners of the Chadstone retail monolith – will own a significant slice in the Melbourne Myer Emporium on Bourke and Lonsdale Streets, through its 33.2% stake in CFS Retail Property Trust.
Interestingly, the Myer Family, who already own a share in the department store through its joint interests in Myer Pty Ltd with private equity firm TPG Newbridge, have technically bought a greater slice of ‘the Myer farm’ off themselves.
The department store has sold for $200 million above the expressions of interest price tag of $400 million.
The sale is a windfall for Myer Pty Ltd, which bought the department store from the Coles Group (formerly Coles Myer) in June last year for around $300 million as part of a $1.4 billion acquisition.
The consortium’s proposal provides for Myer to lease new premises in the historic Myer Bourke Street store, which will be fully restored and refurbished. The proposal includes restoring the heritage listed Bourke Street facades and Mural Hall.
Currently there is a combined 46,000 sqm in both the Bourke and Lonsdale Street stores and the new Bourke Street store will have 42,000 sqm.
The Bourke Street Emporium will be leased back by Myer on a 20 year lease with four 10 year options. The Lonsdale Street Myer store will be leased back on a short term lease but is like to be redeveloped by the consortium.
Myer’s chief executive Bernie Brookes said the existing store would be transformed into a state-of-the-art shopping environment, inspired by some of the world’s great retailers in London, New York and Paris.
“Melburnians, and I dare say all visitors to the CBD, have been waiting for this for a long time. This is an exciting time for Myer and Melbourne.
“Myer Melbourne is the flagship store of our company, and an icon in Melbourne. The commitment of Myer to this city remains steadfast, as reflected by the extended lease we are signing.” Brookes said.
CFS Retail Property Trust’s fund manager Michael Gorman said a completed development of the Myer site would directly align with the fund’s existing Australian portfolio, which includes such landmark centres as QueensPlaza, Brisbane, Chadstone Shopping Centre, Melbourne, and Chatswood Chase Shopping Centre, Sydney.
Gorman said it was proposed that the trust’s share of the acquisition and development will be initially debt funded.
“As a long term participant in the retail property industry, we have developed a strong relationship with Myer Pty Ltd and look forward to finalising this transaction,” Colonial First State Global Asset Management’s head of listed property Darren Steinberg said.
The consortium trumped finalist Lend Lease for the prized Melbourne department store. Industry Superannuation Property Trust and GPT were earlier favourites.
ISPT was considered the dark horse after it bought the nearby Midtown Plaza in May this year. ISPT already owns the Strand Arcade and Melbourne GPO building on the corner of Elizabeth and Bourke Streets.
The Myer Bourke Street Mall is wedged in the centre of the three assets.
This is the second major acquisition for Singapore’s GIC Real Estate. In May this year, GIC Real Estate bought a 50% stake in Westfield Parramatta for $717.5 million.
Australian Property Journal
