David Jones has taken a step towards a potential new development above one of its flagship Sydney CBD department stores.

The retailer has filed a preliminary development submission with the Sydney City council in relation to its Market St property.

David Jones last year flagged the possibility of developing its Sydney and Melbourne properties to help strengthen the business and boost shareholder returns after years of falling sales.

An independent evaluation commission by the company valued the properties at $612 million.

At the time, the company said it was looking into the possibility of building an office block, apartment building or hotel above the Market St store.

On Friday, David Jones said the preliminary development submission was designed to ensure the company can maximise the development opportunities for the property.

“We are committed to ensuring we unlock the maximum value of all of our properties for the benefit of our shareholders,” Zahra said.

David Jones shares were up one cent at $3.01 at 1234 AEDT.

AAP