Charter Hall is reviewing its stake in the Sydney flagship of David Jones after the 188-year-old retailer entered voluntary administration.
According to the filing, the listed REIT, CLW, owns 50 percent of the Elizabeth Street store and received notice that McGrathNicol and FTI Consulting have been appointed as administrators and receivers.
The asset contributes roughly four percent of CLW’s net property income. A bank guarantee covering about twelve months of rent under the rental agreement, as part of the lease terms, is in place, and a break could free the airspace for redevelopment.
Nearby, the firm’s development team is advancing the 38-storey office project Chifley Square South, which also overlooks Hyde Park.
CLW bought its half-share for $255 million. The transaction left the remaining half split evenly between the Charter Hall DVP partnership and Charter Hall Group, each holding a quarter.
Investors in the DVP partnership include Telstra Super and Victorian Funds Management Corporation, according to the filing.
Private-equity firm Anchorage Capital Partners acquired David Jones in 2023 for under $100 million, according to the acquisition details. The Melbourne flagship is owned by IPG David Jones Bourke Street Pty Ltd, part of MA Financial Group’s IP Generation business. MA Financial Group’s IP Generation business completed the acquisition of the property investment manager in September 2025.
Negotiations between Anchorage and major landlords, such as Scentre Group, collapsed. Subsequent talks with Scentre, which runs Westfield centres, offered support to keep the retailer open through the holiday season, but the proposal was turned down. Scentre’s portfolio includes 17 David Jones tenancies, showing its interest in preserving the retailer’s presence during the peak Christmas period.
Rent payments fell behind, with the landlord confirming receipt only through September 30. Financial reports indicated that receivers continue operating stores and the online platform while they evaluate a sale or recapitalisation.
In December 2020, the company purchased the 12-level Castlereagh Street property from David Jones for $510 million, structured as a 20-year triple-net rental agreement as part of its long-term investment strategy. The 3530 square-metre Castlereagh St site at 86-108, fronting Elizabeth and Market streets and overlooking Hyde Park, was bought by Mr Lock from Woolworths Holdings for $223.5 million in December 2024, with a leaseback to David Jones lasting until 2039, and Charter Hall is now reviewing development options and will provide market updates.
The initial net rent was $25.5 million per year, with a minimum 2.5 percent annual increase and additional turnover rent tied to sales, reflecting a long-term income stream.
