David Jones in administration: Sydney flagship lease in focus

Why it matters

The Urban Developer traces the retailer to Sydney in 1838, when it started trading as a draper at George and Barrack streets, and says the Elizabeth Street flagship opened in 1927.

The outlet says David Jones sold that flagship in 2020 for $510 million to a consortium managed by Charter Hall, and leased it back for 20 years. Initial annual rent was $25.5 million, with minimum annual increases of 2.5 per cent.

The outlet cites the deal as an example of the risk in sale-and-leaseback strategies: they free up capital but convert owning property into an ongoing operating cost, and when trading weakens those obligations “can become harder to sustain”.

The article does not say what the administration means for the Elizabeth Street lease or for Charter Hall.

The numbers

According to the outlet, Scentre told the market this week that David Jones takes up roughly 200,000 square metres across 17 Westfield centres. It adds that the retailer is believed to lease about 390,000 square metres overall.

Scentre’s share of gross rent from the David Jones stores was $45 million for calendar 2026, or $352 per square metre, against a portfolio average of $942 per square metre, the article says. Those stores make up about 1.8 per cent of Scentre’s gross rent. Scentre additionally holds roughly $30 million of bank guarantees backing those stores.

At Westfield Tuggerah, the outlet says Scentre is repurposing former David Jones space. JD Sports and Rebel have opened, and Timezone is due in the second quarter of 2027. Scentre said foot traffic was up 6.2 per cent over the eight weeks following those openings.

What’s next

The Urban Developer says administrators and receivers are now in control, and the fate of individual stores will depend on the retailer’s prospects and the value of the real estate it leaves behind.

The article says landlords face decisions on rental guarantees, lease restructures and replacement tenants. It adds that re-leasing large department store floors may require changes to floorplates, services, access and circulation, citing sector sources.

This is a follow-up to our report on the expected closure of the Westfield Woden store in the ACT, where the closure was still reported as expected, not confirmed, before the administration was announced.