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Some of the world’s largest real estate investors are vying to buy the upper floors of John Lewis’ flagship department store on Oxford Street, which is set to be converted into office space.
Hines, in partnership with Korea’s National Pension Service; Helical, in partnership with JP Morgan Asset Management; and Nuveen Real Estate are the final three bidders to buy the 300K SF development opportunity, React News reported.
Retailer John Lewis owns the 679K SF store on Britain’s busiest shopping street, and last year announced plans to convert the upper floors to office space, cutting back the amount of retail as interest from consumers in department stores wanes. Once the conversion is complete, the retail element of the building will be slimmed down to about 300K SF.
John Lewis is selling the development opportunity for an initial £150M, React said, and the end value of the office scheme could be £750M, based on a capital value per square foot of £2,500.
For whoever buys the scheme, it will be a long-term play — John Lewis will not release the space for conversion for another three to four years, React said.
Given the woes of the department store sector, every department store on Oxford Street except Selfridges is currently at some stage of converting retail space to offices in a trend that will see more than 1M SF created in a 500-yard stretch in a span of just two to three years.
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