Dexus announced today that it has unconditionally exchanged contracts to sell two office properties for a combined sale price of $443.2 million of which Dexus’s ownership interest represents $336.3 million. 

The combined sale price is broadly in line with last stated book values, reflecting a 0.8% weighted average discount to the 30 June 2024 valuations. 

The properties are, 100-130 Harris Street, Pyrmont which was sold for $229.3 million in line with the 30 June 2024 book value. The property is an A grade boutique heritage office building located in the Sydney CBD fringe market of Pyrmont, with occupancy by area of 83% and a WALE of 4.3 years. Settlement is expected in early 2025.

100-130 Harris Street Pyrmont Sydney was brokered by Rob Sewell, Head of Office Investments, McVay Real Estate. 

The second is 145 Ann Street, Brisbane which was sold for $213.9 million1 by the Dexus Office Partnership, in which Dexus has a 50% leasehold ownership interest, reflecting a 1.7% discount to the 30 June 2024 book value. 

The property is an A grade office building located in the northern periphery of the Brisbane CBD with occupancy by area of 84% and a WALE of 3.2 years Settlement is expected in December 2024.

Sale proceeds would reduce Dexus’s pro forma look-through gearing3 by circa 1.5 percentage points and contribute toward Dexus’s circa $2 billion of divestments earmarked across FY25- FY27.

145 Ann Street Brisbane CBD Office building sold to Aware Real Estate alongside the Navigator Property Group brokered by JLL Directors Paul Noonan and Seb Turnbull.

The sale of 145 Ann Street Brisbane CBD Office building transaction was reported in COMMO on 23 November 2024. 

At the time Aware Real Estate Head of Investment and Capital Transactions Pete Carstairs said the acquisition was aligned with ARE’s strategy to target office opportunities along the Eastern seaboard.

“This asset has cleverly designed floorplates that capture expansive views, is close to public transport and offers tenants high quality amenities,” he said.

“Expanding into the Brisbane office market will also provide ARE geographical exposure to a new, core eastern seaboard market that is currently showing growth due to market tailwinds.

Mr Carstairs said the Brisbane office market performance was strong relative to other Australian and Global office markets due to limited supply, a strong tenant demand and declining vacancy rates which in turn drive effective rental growth.

“Our analysis has identified favourable drivers such as below average A grade market vacancy rates which lead to a forecast of significant rental growth over the next five years together with a strong state economic outlook,” he said.

He also added that the inter-state migration was driving further demand for office space and was combining with limited capacity of builders to divert from locked in infrastructure projects to increase built office supply.

Mr Carstairs said one of the key differentiators of 145 Ann Street in the Brisbane leasing market was its higher level of sustainability credentials compared to many key peers including: 6-Star Green Star Performance rating for Building Operations and high operating performance certifications for NABERS Energy (5.5 Star), Water (4.5 Star) and Indoor Environment (4.5 Star) and Climate Active Carbon Neutral Certification.

“Environmental credentials are critical for major tenants looking for office spaces that meet their environmental criteria,” he said, adding ARE would aim to further improve the environmental performance of the asset.

JLL’s Paul Noonan and Seb Turnbull handled the off-market deal for the high-quality 27-level A-grade tower at 145 Ann Street on behalf of Dexus. Mr Noonan, JLL’s QLD Managing Director, saidthe deal underscored a strengthening investor focus on the state’s capital. 

“This acquisition by Aware Real Estate, alongside Navigator Property Group, marks the return of institutional capital to Brisbane in this current cycle,” Mr Noonan said.

“We continue to see increased focus on the Brisbane market as investors seek the growth prospects our market is predicted to deliver.”

Tom Phipps, Managing Director at Navigator, noted “While capital markets are challenging, the Brisbane leasing market is on the rise with relatively low vacancy compared to other capital cities and a limited supply pipeline.”

Click here to read more on the 145 Ann Street Brisbane CBD Office building transaction.