Deka Immobilien buys Bvlgari building in Sydney for $56m

German funds manager Deka Immobilien has swooped on the Bvlgari store in the heart of Sydney.

German funds manager Deka Immobilien has swooped on the Bvlgari store in the heart of Sydney, picking up the bulk of the building that houses the luxury retailer in a deal worth about €36 million ($56m) as the very top end of the market defies gloomy retail conditions.

While Melbourne’s Chapel Street is in the doldrums, with retail veteran Solomon Lew calling time on the once-busy shopping strip by closing his outlets there, well-heeled office workers and tourists are providing spending support for the eye-watering ­prices being paid in Sydney’s CBD.

The Bvlgari property was sold by Spain’s Allegra European Holdings, which has benefited from a dramatic overhaul of the flagship Sydney store on Castle­reagh Street after picking up the building from JPMorgan Asset Management for $29m two years ago.

The retailer has signalled its commitment to market with a new multi-million-dollar fit-out heavy on Italian marble, walnut parquet flooring, suede wall finishes and Murano chandeliers.

The big spending by the luxury jewellery, watch and leather goods house, which is part of conglomerate LVMH, is helping it compete with other global players capitalising on the bustling Sydney scene that partly depends on Chinese tourists still spending and the city’s transport and office projects eventually finishing.

Tiffany & Co has led a revival of Sydney’s King Street with a flagship store on the corner of Pitt Street, after shifting from Martin Place as the area is overhauled for a metro station and Macquarie Group office project.

Louis Vuitton is on the corner of King and George streets and Chanel at the corner of King and Castlereagh Street, giving the strip renewed prominence for luxury shoppers. Hermes has also taken floors in the prestigious heritage Trust Building in King Street.

Deka Immobilien will put the property, built as a hotel in 1914 and converted to an office building with ground floor commercial space in the 1960s, into its open-ended real estate fund.

It will take “partial ownership” of about 950sq m of space in the building, all of which is leased under a long-term lease to the luxury brand. The space is divided between three floors, with the recently modernised ground floor and first lower level being used for retail and the first floor for offices.