Dexus has confirmed that it has exchanged contracts to sell 383-395 Kent Street, Sydney to Charter hall reflecting an initial passing yield of 5.1%.
383 Kent Street, Sydney is a 17,928 square metre, A-Grade office building located in the western corridor of the Sydney CBD.
The property was 98% occupied with a Weighted Average Lease Expiry of 2.0 years, with these metrics increasing to 100% and 3.2 years respectively in early September 2021. Major customers include Wilson Parking, Grant Thornton Australia and InterSystems Australia.
Recognised as a “tower cluster site” under the latest planning controls, the site is strategically significant as it allows for long-term development optionality and floorspace expansion potential of the existing buildings, which includes approximately 18,000sqm of office space plus a multi-level, approximately 800 bay public car park.
Located adjacent to CPOF’s 40,000sqm 2 Market Street office complex and situated on a large strategic corner site, 383 Kent Street provides large existing floor plates of more than 1,500sqm, 4 elevations of natural light and expansive views across Darling Harbour and the CBD.
With 100% occupancy, current leases include major tenants such as Grant Thornton, InterSystems Australia and Mott McDonald, with Wilson Parking operating the building’s public carpark.
CPOF Fund Manager, Matthew` Brown, said, “This strategic acquisition builds on CPOF’s portfolio of prime CBD assets, with multiple expansion and redevelopment options. This transaction supports our strategy to acquire high quality modern assets where we can successfully create major CBD precincts given its prime location.”
Charter Hall Office CEO, Carmel Hourigan, said, “Post completion of this acquisition, the CPOF portfolio will grow to $9 billion and will continue to cultivate its develop to core strategies, with current developments under construction or in planning phases within four major CBD markets, pre-committed to major customers such as Amazon, Australia Post and the Commonwealth Government’s Services Australia.”
The sale to Charter Hall will realise proceeds of $385 million, reflecting a 1.3% premium to last stated book value. Net sale proceeds will initially be used to repay debt.
The sale was the result of a competitive, on market sales process with settlement expected in July 2022.
Dexus Chief Investment Officer, Ross Du Vernet said: “This transaction is in line with our strategy of recycling out of some core properties and reinvesting into higher returning opportunities including our sizeable development pipeline. This result demonstrates continued investor demand for quality office properties in core markets.”