The private Cohen family has bought the Block Arcade in Melbourne, at a time when retail property is in demand. The group owns the adjoining property.
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The sale of the Block comes as the Melbourne shopping precinct leads the country with the opening of new flagship stores of Swedish H&M and the Japanese fashion label, Uniqlo.
On Wednesday, the Emporium also opened, which will add to the mix of Melbourne retailers.
The sale comes as department store David Jones is sitting on a goldmine of $650 million worth of real estate, plus a significant development pipeline in Sydney, that could deliver long-term profits.
The predator, the South African Woolworths, said it had not factored in any sales of the four stores owned by David Jones - two in Bourke Street, Melbourne, and Elizabeth and Market streets, Sydney, in its proposed $2.75 billion takeover.
However, analysts have said the cash raised through a sale and lease back of the properties could be used for the growth of the operations.
It is understood Colliers International has been appointed to review the potential sale or redevelopment opportunities for the David Jones property portfolio. David Jones also lodged a preliminary development submission in relation to its Market Street property in February.
The group first raised the possibility of redeveloping the air space above its Market Street menswear store in March last year when its group executive of retail services at David Jones, Tony Karp, said David Jones was undertaking a review of its property portfolio.
The Sydney submission seeks to obtain a non-binding response from Sydney City Council in relation to the proposed development of this site. Merrill Lynch analysts have said the Market Street site could be converted to a specialty and concept store retail space.
''If Market Street could be re-leased for more specialty usage, we estimate it could be rented for about $35 million per annum,'' they said.
''This assumes a range of rent levels based on the attractiveness of each floor with respect to traffic. For example, the ground floor could be leased for as much as $5000 per square metre, whereas the basement would likely fetch only about $100 per square metre.
''Office space at the upper levels would be rented closer to $500 per square metre.''
David Jones confirmed last year it was conducting an extensive review of its property portfolio as it heads into a period where leases are expiring and stores are being redeveloped and converted into smaller formats.
The search is on for new sites in neighbourhood strips across the nation, seeking sites of about 7000 square metres, based on the village store format in Malvern, Melbourne.
This is seen as one the most thorough reviews being planned by the department store chain in many years.
