Myer is threatening to leave the city site that bears its name

Myer is threatening to leave the Myer Centre in Rundle Mall, saying it’s devoid of shops and its Singaporean owner has let it deteriorate.

The entrance to the Myer Centre in Rundle Mall. Picture: Matt Loxton

Department store Myer could shift out of the iconic Myer Centre Adelaide after launching a legal claim against its Singaporean landlord, saying that it has let the property deteriorate.

The stock exchange-listed Australian retailer is claiming that it has the right to terminate its lease, arguing that the centre is not up to scratch as it is littered with empty shops and can no longer pull customers.

Myer has been the anchor tenant of the centre since it was launched by then-SA premier John Bannon on June 3, 1991.

The site laid claim at the time to being one of the most expensive buildings ever built, costing $570m – more than $1bn in today’s money – with six levels of specialty shops and the famous Dazzeland amusement centre replete with rollercoaster, spanning the top two floors.

While about 250 million people are reported to have frequented the venue since its opening more than 30 years ago, the retail offerings on the top floors have waned over recent years.

At and near street level it has been a different story, with popular Japanese clothing retailer Uniqlo opening last November.

The upper floors of the Myer Centre in Rundle Mall. Picture: Brenton Edwards

Myer has form in terms of leaving long-term CBD sites, announcing just last week it would pull out of the Myer Centre in Brisbane where it has been the anchor tenant since 1988.

READ MORE: 30 years of the Adelaide Myer Centre, from Dazzeland to Daryl Braithwaite

The retailer’s landlord YTL Starhill Global Real Estate Investment Trust, which bought the Adelaide property in 2015, said that it had received a notice of arbitration from Myer this week.

“Under the Arbitration Claim, Myer alleges that the Landlord has breached, and is continuing to breach, the Myer Lease by maintaining the Myer Centre Adelaide in a condition whereby it is substantially empty of suitably presented retail stores,” YTL said.

The department store occupies just over half of the centre’s space but alleged there has been a breach of its lease which currently runs until June 2032.

The UNIQLO opening late last year was a hit with shoppers. Picture: Keryn Stevens

YTL struck back in a statement to the Singapore Stock Exchange, saying it considered the claim “ill-founded and will take all steps necessary to vigorously defend” the action.

Myer is claiming unspecified damages and is seeking a declaration that it is entitled to terminate its lease. YTL said the arbitration claim was at an early stage and the process is expected to take more than 12 months, unless it is settled earlier.

Myer has been paying rent under its lease and the Singapore company said it did not consider that the claim was likely to have a material impact on its income in this financial year.

The former Dazzeland rollercoaster in the Myer Centre.

The Myer Centre Adelaide is valued at $S239.3m and accounts for a small part of the Singapore company’s portfolio.

The dispute is the latest battleground for the retailer which reported strong results in February but this month said it would exit the Myer Centre Brisbane after failing to agree terms with the landlord Vicinity Centres and ISPT.

Department stores have been shrinking their footprints around the country, often working with landlords who want to bring in more productive retailers and boost foot traffic.

But now that malls are returning to a more normal setting in the wake of the pandemic big retail chains are no longer seeking emergency relief from their landlords and are cutting back their holdings more savagely.

YTL bought the property in 2015 and had hoped to revamp the complex which has a storeyed history as one of the state’s most prominent properties.

“As the matter is subject to legal proceedings, we will not be commenting further at this stage,” a Myer spokesperson said.