Investors await DJs property plans
The update could include plans to redevelop its flagship Sydney and Melbourne assets to include some new residential component.
In September last year, the department store chain said it had appointed real estate consultants Cushman & Wakefield to value the four stores it still owns, two in Sydney and in Melbourne.
The value was a combined $612 million, with the store in Elizabeth Street in Sydney among the most valuable due to its air rights above the existing seven floors.
In October, group executive of retail services Tony Karp was quoted as saying the retailer was "sitting on significant value and we are motivated to determine how best to monetise that value".
But the group is said to be reluctant to enter into any sale and leaseback of the prime city assets.
At the time the Cushman & Wakefield report was issued, DJs' directors made a commitment to give the market an update on development plans for the CBD properties at the interim results.
Early appraisals revealed the department store could add about 20 storeys to its Market Street, Sydney, property and three to five storeys to its Elizabeth Street store.
David Jones has looked at hotel and apartment options for Market Street but Mr Karp said an office development could be considered.
Citi analysts said the Market Street store was the most lucrative option: "We estimate $100 million to $150 million in value creation from a redevelopment."
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Investors are awaiting David Jones' property strategy update at its first-half results presentation, where management is expected to outline plans for redeveloping flagship Sydney and Melbourne assets and how it might monetise those property values.
The focus is on the four stores David Jones still owns — two in Sydney and two in Melbourne — with particular attention on the Market Street and Elizabeth Street stores in Sydney as potential redevelopment sites.
Cushman & Wakefield valued the four owned stores at a combined $612 million when engaged by David Jones to assess the properties.
The Elizabeth Street store is among the most valuable because it has air rights above the existing seven floors, giving it greater scope for vertical redevelopment compared with other sites.
David Jones has looked at hotel and apartment options for the Market Street site, and group retail executive Tony Karp has said an office development could also be considered.
According to the article, the group is said to be reluctant to enter into any sale-and-leaseback of its prime city assets, preferring other ways to unlock property value.
Early appraisals suggested the Market Street property could potentially add about 20 storeys, while the Elizabeth Street store might be able to add three to five storeys.
Citi analysts estimated redevelopment of the Market Street store could create approximately $100 million to $150 million in value.
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