Australia: Department store and its landlord fight over asbestos removal bill

Department store and its landlord fight over asbestos removal bill

Melbourne, Australia - Department store retailer, Myer, is in a battle with the company it recently sold its building to over the costs for removing asbestos after the deadly substance was discovered in its flagship store in Melbourne.

Myer sold the property in June to a consortium led by CFS Retail Property Trust for $605 million. The new owner had planned to perform a $170 million renovation project to make over the outdated-looking building but while in the process of surveying the store, it discovered a significant amount of asbestos it wasn't expecting.

CFS has demanded that the retailer pay for part of the asbestos removal costs, which Myer is refusing to do.

A spokesman for Worksafe Victoria, the agency which keeps track of locations that may potentially contain asbestos, said he wasn't surprised of the news that a building as old as the Myer department store contained asbestos. However, the companies in the consortium said they were not aware of the asbestos risk when they agreed to purchase it.

A top executive from Myer said the redevelopment project was CFS's concern.

However, the presence of asbestos poses a problem for Myer, which still conducts business in the building. Until the asbestos is removed, the fifth and sixth floor of the building, which house the children's clothing department and Mural Hall respectively, are closed off for cleanup work. This hurts Myer's already struggling sales due to consumer dissatisfaction.

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