Dexus has confirmed that it has exchanged contracts to sell 44 Market Street, Sydney, taking a -17% hit on its book value.
The result is another telling tale on the state of the office market, hit hard following the COVID pandemic with higher vacancy, higher incentives and now higher interest rates.
44 Market Street offers 30,000square metres of A-Grade office space with 1,000 square metres typical floor plates and multiple lease configurations ranging from small suites to entire floors. The upper levels benefit from panoramic views and lower levels receive plenty of natural light as a result of 44 Market’s corner position on York, Clarence and Market Streets.
The property underwent an $18 million refurbishment in 2019 with major modifications to the ground and mezzanine retail floors, a new cafe kiosk, new commercial tenancies and an upgrade of external landscaping. The building also boasts a new kind of workspace, SuiteX with flexible spaces, flexible leases, and turnkey layout across ten design-led suites, with demountable wall systems enabling tenants to retract or expand as needed.
Dexus will realise proceeds of $393.1 million, in the sale to Hong Kong’s PAG.
Dexus had held the 30,000 square-metre A-grade tower at $475 million in its December book valuations based on a capitalisation rate of 5.5 per cent. The latest price reflects a 6.6%+ yield.
The deal was brokered by Knight Frank’s Ben Schubert and Paul Roberts and JLL’s Luke Billiau, James Barber and Sophie Tieman.
The sale remains subject to FIRB approval and is otherwise unconditional with settlement is expected in late July 2023.
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