Pitt Street stalwart up for lease

The four-storey Emporio building, which belongs to the Goddard family and has been famous for its "four floors of shoes", is surrounded on three sides by Westfield's $800 million redevelopment of the strip and has been trading throughout the demolition and development phases of the Centrepoint and Imperial arcades for the past two years.

The family has consistently resisted the urge to sell to Westfield, or any other developer, over the years. However, about six weeks ago, they decided the scaffolding and drilling were too much and put the property up for lease through agent Alex Alamsyah of Knight Frank.

The Goddard store was once known as Mister Figgins. It is at 182 Pitt Street and has a footprint of 177 square metres.

Rented, it would command more than $8000 a square metre.

It has been said that once Pitt Street Mall is completed, rents along the country's busiest shopping strip will go as high as $15,000 a square metre for prime locations.

According to property records, Goddard Nominees bought the site for about $7.2 million in 1994 from what was then known as Legal & General. The records show there are two other independently owned buildings along the Pitt Street Mall.

One of the others is the Country Road site at 142-144 Pitt Street Mall, on the corner of King Street and next door to the Glasshouse Arcade. It is owned by a syndicate, Gwynvill, which paid $14.5 million for the 316-square-metre building in 1990.

Directly opposite, at 181 Pitt Street Mall, also on the corner of King Street, sits the Bally property, which was formerly the Liverpool Arms Hotel.

The Goddard leasing comes as the retail sector, overall, enters another quarter of tougher times.

The chief economist at CommSec, Craig James, said Australian retailers were being forced to adapt to the "new realities" such as above-normal temperatures and conservative consumers.

Smaller retailers were more at risk in the current environment, less able to match the discounting by larger retailers.

"While autumn has so far proved warmer in many parts of the country, this is a trend that has been evolving over the past decade," Mr James said.

"If clothing and department stores have not adapted to the new realities of Australia's climate, then investors would be right to ask why. But it's not all bad news, with the cost of imports plunging at the fastest pace in 27 years.

"If retailers are able to hold on to the currency benefits, then bottom-line profits will be supported.

"A stronger job market and a petrol price war are the other positives for retailers."

But it's not just retailing that is under the spotlight along the strip. Commercial space is also being snapped up.

Market suggestions are that Aecom has committed to new space at 420 George Street, also in the city centre. The engineering company is said to be taking up space in the low-rise of the building below State Street. Under that lease deal, most of the new office skyscraper will be leased. It sits atop the newly opened Mid City Centre retail site, which is also close to being fully leased.

Sir Richard Branson has taken out floors in the centre for his new fitness centre venture, known as "More Richard Than Gym".

Fortius Funds Management and Lend Lease's wholesale fund, Australian Prime Property Fund Retail, are the owners and developers of the site, which is seen as the benchmark for the next generation of office and retail space in the market.

Real estate company CBRE has been appointed by Aecom, with sources saying the engineering group was debating whether to move to 420 George Street or stay in its Dexus-owned premises at 44 Market Street.

The group was also said to have looked at space available at 175 Pitt Street.

Meanwhile, Westfield has released plans to build another office block, at 85 Castlereagh Street, where investment banking house JP Morgan will be the anchor tenant.