After 150 years in the same hands, the landmark Soul Pattinson heritage building in Pitt Street Mall is to be sold with a value of more than $100 million.
It is the fourth-last privately owned property along the strip, which houses one of the longest-running chemists in the country.
No decision has been made regarding the chemist business, but any new owner is expected to review the property, tenant and the air rights for redevelopment, including heritage issues.
The Washington H. Soul Pattinson business was founded in 1870, opened the chemist in 1873 and has seen Pitt Street Mall evolve into one of the busiest shopping strips per capita in the world.
It is now home to some of the richest retailers in the world including the owners of fast fashion labels Zara, H&M, Forever 21 and Westfield Sydney, now owned by the Scentre Group.
But most of the properties are predominantly owned by real estate investment trusts, including Stockland and Investa.
There is expected to be a long of buyers for the building, which is between H&M and make-up group Sephora, and opposite the Mid City Centre, which recently sold for $320 million to Hong Kong-based NGI Investments.
International retailers will also be keeping a close eye on the sale as it would be considered a prime location for a new flagship store if the existing pharmacy was closed.
JLL’s Simon Rooney and Rob Sewell, appointed to sell the Sydney retailing icon, said it unquestionably was a unique, super-strategic and one-off opportunity to secure an “absolute prime foothold in Australia’s strongest retail strip, Pitt Street Mall”.
JLL’s Australasian retail investments head, Mr Rooney said 160 Pitt Street was one of just 10 properties with Pitt Street Mall frontage, “highlighting the scarcity of super-prime investment opportunities and the highly consolidated nature of the mall, being just two-thirds the length of Melbourne’s Bourke Street Mall and half the length of Brisbane’s Queen Street Mall”.
“There’s no typical buyer for this property. It’s going to appeal to a very wide range of groups, ultra-high-net-worth private investors, offshore groups looking to secure a freehold stake in one of the world’s top retail destinations and Australia’s most iconic and successful retail precinct. We also expect to see keen interest from major retailers looking to secure a highly sought outlet on arguably Australia’s strongest and most vibrant retail strip.”
Mr Rooney said Pitt Street Mall was s the most productive retail in Australia, with estimated sales of about $1.4 billion or productivity of around $14,000 per square metre per annum.
“It has exposure to exceptionally high pedestrian traffic with 65,000 visitations a day, which has drawn high-profile international retailers to Pitt Street Mall in recent years such as H&M, Zara Home, Topshop, Sephora, Forever 21, Uniqlo and Microsoft.
“As a result of the high retailer demand for presence along Pitt Street, it now commands some of the highest rents in the world, with recent evidence showing rates of $12,000 per sq m to $15,000 per sq m pa.”
JLL’s head of office investments – Australia, Mr Sewell said Sydney’s Midtown is a beneficiary of new infrastructure projects in the Sydney central business district.
“The Sydney light rail and Sydney Metro (stage 2) will improve the accessibility of the precinct and make it an even more desirable location for organisations,” Mr Sewell said.
“However, there are limited options for contiguous space in Midtown. Vacancy has compressed to 6.4 per cent – well below the 10 year average of 8.1 per cent.”
Mr Sewell added that there was tangible evidence that rents were rising in Midtown.
“Multiple capital sources are subscribers to the Midtown investment thesis and investor expectation of above-trend effective rental growth is reflected in under-writing assumptions,” Mr Sewell said.
Demand is also very strong in other states for what are seen as “iconic” retail sites.
In Melbourne, Myer Family Investments’ one-third share in the historic Myer Melbourne property in the Bourke Street Mall is under contract with expectations over $150 million.
LaSalle Investment Management is offering for sale the St Collins Lane shopping centre and Novotel on Collins hotel for about $500 million.
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