Melbourne's premier retail development, the Emporium, has 90 per cent of its tenant income secured despite the city's subdued leasing environment.
But the project may be struggling to meet its completion deadline after suffering delays and a $125.9 million write-down after an independent revaluation by joint-owner CFS Retail Property Trust Group.
The Emporium, half-owned by CFS and the Government of Singapore Investment Corporation (GIC), is being built by Grocon on the site of the former Myer Lonsdale Street store.
CFS revised the project's December construction deadline in June, saying it would be delayed until March 2014, a hold-up that would add $15 million to its costs.
In an annual statement CFS said it had made "solid progress on the development ... with 90 per cent of income secured".
The Emporium's revaluation was the result of several factors, CFS said.
They included changes to the building to accommodate international and luxury tenants, the blowout in the completion date and subdued leasing environment.
Japanese fast-fashion brand Uniqlo confirmed two weeks ago that it would open its first Australian store, a 3000-square-metre, four-level flagship tenancy, in the Emporium.
Other tenants signed to the building include Max Mara, Paul Smith, adidas, Superdry, Super Glue, Topshop, Coach, Salvatore Ferragamo, Mulberry, Scanlan & Theodore, sass & bide, Zimmermann, Oroton, Marcs, Saba, lululemon, Carla Zampatti, Georg Jensen, Alannah Hill and Max&Co.
Industry sources said the project was struggling to meet its March completion date.
Employees on the site were being asked to work longer shifts and would receive less leave over Christmas because work was behind schedule, they said.
But CFS fund manager Michael Gorman said the project was on track.
"As anyone can see walking past the site, we have made great progress but there is still quite a bit of work to do," Mr Gorman said.
The development has been subject to a bitter dispute between Grocon and building employees in the Construction, Forestry, Mining and Energy Union who blockaded the site between August 28 and 31 last year.
In July, Commonwealth Bank revealed plans to internalise the management of its listed real estate investment trusts, including the CFS Retail Trust.
Since then speculation has persisted that a major shareholder in CFS Retail - billionaire John Gandel who also co-owns Chadstone Shopping Centre with the trust - may look to buy out the management from the bank.
Any deal would give the Gandel Group access to prime retail malls across the country, including the Chatswood Chase centre on Sydney's north shore.
CFS Retail also owns a number of Direct Factory Outlet centres, which it sees as a growth sector in the retail industry.
CFS's stablemate, the Commonwealth Property Office Fund, is now the subject of a takeover by Dexus Property Fund.
The Emporium's eight levels will house 225 stores on a gross leasable area of 48,000 square metres, with Myer accounting for 7000 square metres.
CFS Retail also owns a 33 per cent stake of the Myer Melbourne department store, which has a book value of $111.7 million.
The Emporium's last valuation was $325 million.