Atlassian development update

24 March 2022

Dexus has reached agreement with Atlassian to fund, develop and invest in Atlassian’s new headquarters in Sydney.

The development is located adjacent to the Central Place Sydney development, and within the State Government-led Tech Central precinct.

This follows Dexus entering into binding terms to provide a framework for the transaction that were previously announced to the Australian Securities Exchange on 20 July 2021.

The site is located at 8-10 Lee Street, Sydney and spans 3,487 square metres. The development, spanning circa 75,000 square metres of GFA, will comprise a market-leading sustainable 40-level office tower, with retail amenities and new YHA accommodation space at its base, as well as new public realm around Central Station. Atlassian will occupy the office accommodation under a 15-year lease.

Dexus has worked with Atlassian to develop the design and progress negotiations with a number of third party stakeholders to facilitate the development, including the NSW Government on the Project Development Agreement. Dexus group will fund 100% of the project costs during construction through debt facilities and will retain an estimated 60 – 65% equity interest in the asset on completion after refinancing and partial return of capital to Dexus. Dexus may also look to introduce third party capital into the project prior to completion. Atlassian will retain an estimated 35 – 40% interest in the asset on completion.

Ross Du Vernet, Chief Investment Officer, said: “This unique project will catalyse Sydney’s innovation and technology precinct, Tech Central and set a new global benchmark in sustainability and smart workplace that challenges the status quo. It has been a productive partnership over the past eight months in which we have worked with Atlassian to make their bold vision a reality, and we are looking forward to the long-term relationship.”

The total project costs are expected to be circa $1.4 billion. The transaction is subject to a set of conditions precedent prior to financial close which is expected to be satisfied by mid-2022, with construction expected to commence shortly thereafter and reach completion in 2026.

The development project has no material impact on Dexus’s Adjusted Funds From Operations or distribution per security in FY22.