Luxury brand Hermes is closing in on a new lease deal in the Sydney CBD, a move that could see it join the biggest names in luxury, Dior and Chanel, in a “luxury super block”.
It is understood Hermes has pipped another luxury brand, Valentino, for the multiple-floor lease at the prestigious heritage Trust Building at 155-159 King Street, a corner site with Castlereagh Street.
Dior’s flagship store sits across the road, as do the Chanel and Bulgari stores.
The new “super corner” will soon be bolstered by more luxury space in the diagonal corner, which is occupied by the MLC Centre.
Owner of MLC, GPT and new joint owner Dexus, already have a longstanding development application in place to remove the escalators on the corner and replace them with retail space.
At the GPT results on Tuesday, GPT’s head of office and logistics Matthew Faddy reaffirmed the owners of MLC were ready to “focus on further capitalising on the asset’s central Martin Place location through the redevelopment of the retail precinct”.
“GPT and Dexus as co-owners of the MLC Centre have DA approval to remove the escalators on the corner of Castlereagh and King Street and replace them with high-end luxury retail,” a a GPT spokesman said.
“With Dexus’ recent acquisition of 50 per cent of the MLC Centre all options to enhance the asset including the current approved DA are being revisited by the co-owners.”
Dexus and its wholesale fund bought half of the MLC Centre for about $720 million last June.
The space that Hermes is likely to take up are the ground and mezzanine levels of the Trust Building, owned by a long-time private owner.
The campaign to improve the profile of the building with a strong tenancy started last year, when the owner sought a development application with the City of Sydney council to renovate the two levels for “retail purposes”. The renovations include reinstalling a prominent corner entry and internal facelifts.
The application was approved in June, and it is understood that Valentino was in talks to secure the space, later replaced by Hermes.
The potential deal would see Hermes expand its retail footprint beyond its current single-floor space a block away at the corner of Castlereagh and Pitt streets.
The 713 sq m Trust Building is a strata with its upper floors made up of a mix of owner-occupier use and office tenancies.
Comment was sought from Hermes but it did not respond.