Industry sources speculated H&M could be the new tenant of the iconic building. Photo: Pat Scala

Swedish retail giant H&M is setting up shop in Melbourne's iconic GPO building.

The owners of the 150-year-old building, property fund managers ISPT, announced on Wednesday the retailer had chosen the GPO for its much-anticipated first Australian store.

The new store, due to open in mid-2014, will become H&M's Australian flagship outlet and one of its biggest in the world, occupying three floors and almost 5000 square metres of the heritage listed GPO building.

Gisele Bundchen in a campaign for H&M. Image via vogue.co.uk

Fairfax Media reported in March that dozens of GPO retailers were being kicked out of their stores to make way for a large international retailer. While ISPT would not confirm the identity of the retailer at the time, industry sources speculated H&M could be the new tenant.


Just days earlier the retailer had posted on social media that "We are happy to announce that we will open our first H&M store in Australia, in 2014! Stay tuned for more details."

Sam Curry, retail asset manager at ISPT, said the arrival of H&M would be part of the revitalisation of Melbourne's CBD retail precinct, with fellow international fast fashion chain Zara, just metres away.

“We are delighted to have this opportunity to introduce such a famous and highly anticipated international fashion retailer to the Australian market,” Mr Curry said. “The H&M flagship at GPO will truly differentiate the city of Melbourne as a retail destination benefiting shoppers and other retailers alike."

H&M has 2900 stores across 51 markets and aims to increase its number of stores by 10-15 percent per year.

It is the latest big-name international retailer to arrive in Australia following the arrival of Gap in August 2010, Zara in April 2011 and TopShop in December 2011.

A recent report by Colliers International found 28 international retailers would establish 235 new stores and look for 220,000 square metres of Australian retail space within the next five years.