Melbourne’s iconic Myer flagship store in Bourke Street Mall could soon change hands in a deal worth around $450 million, as private investors look to capitalise on improving retail conditions in the CBD.

Funds manager Forza Capital is understood to be conducting due diligence on the historic department store building, which has been home to Myer since 1914.

The potential off-market transaction would consolidate ownership of the nine-level property, which is currently split between Abacus Property Group (50%), Vicinity Centres (one-third) and Charter Hall Long WALE REIT (about 17%).

The building connects directly to Emporium Melbourne via multi-level walkways and underwent a major redevelopment in 2014. It was last valued at about $432 million, with a capitalisation rate of roughly 5.5%, and values have since strengthened as city retail rebounds.

The prospective acquisition highlights renewed confidence in Melbourne’s retail property market following several challenging years marked by the rise of e-commerce, pandemic lockdowns and a slow return of office workers to the CBD.

Local investors have increasingly stepped into the market as offshore buyers remain cautious about Victorian property due to higher taxes and regulatory settings. This has created opportunities for domestic funds willing to take long-term positions in prime assets.

The Myer building’s strategic location in the heart of Bourke Street Mall – Melbourne’s busiest retail strip – continues to underpin its value, with strong pedestrian traffic and proximity to major shopping centres including Emporium and Melbourne Central.

It’s suggested that the building’s future could involve further retail diversification, with landlords increasingly repurposing department store space to accommodate specialty retailers and direct-to-consumer brands.

While Forza Capital has not publicly outlined its plans, investors are closely watching the deal as a signal of confidence in Melbourne’s long-term retail recovery.

If completed, the transaction would mark another major shift in ownership for the landmark property, which has changed hands several times over the past two decades.