Dexus announces that it conditionally exchanged contracts to sell 10 Eagle Street, Brisbane on 1 April 2021. The asset is owned by the Dexus Office Partnership, in which Dexus holds a 50% interest alongside Canada Pension Plan Investment Board.
The sale will realise proceeds of $285 million, with Dexus’s net sale proceeds being used to repay debt.
10 Eagle Street is a 34-level, 27,800 square metre, A-grade office asset, located in the centre of Brisbane’s “Golden Triangle” and was built in 1978. At 31 December 2020, the property was 92% occupied with a WALE of 2.9 years. Key customers include AEMO, Wilson Parking and Accenture.
Dexus held the asset at a combined book value of $280m, reflecting a cap rate of 5.5%.
The sale, at a price slightly above book value, was the result of a competitive, on market sales process with Marquette Properties exchanging contracts with Dexus. Settlement is expected in May 2021.
Dexus Chief Investment Officer, Ross Du Vernet said: “This transaction continues our asset recycling strategy, realising value for both Dexus and our Dexus Office Partner while reducing our exposure to the Brisbane market. It also provides us with an excellent opportunity to focus our leasing, asset management and development capabilities on advancing our city-shaping development project at Waterfront Brisbane.”
Marquette Managing Director, Toby Lewis said: “As a Brisbane-based and focused investment firm we are thrilled to be acquiring one of Australia’s best known office towers. We are acquiring a great asset with an excellent tenancy profile due to Dexus’s best-in-class management. Despite the ongoing long-term uncertainty associated with the COVID-19 pandemic, we have enabled more than 150 Australian families to invest in 10 Eagle Street and look forward to delivering strong returns as Brisbane continues to grow as a city and a city to invest in.”
Dexus are continuing to pursue the Eagle Street pier redevelopment, which is located opposite 10 Eagle Street and was approved by Brisbane City Council in December 2020.
Our Views
The sale of 10 Eagle Street at a price slightly above book value is a good result for Dexus. The property sits in an excellent position in the golden triangle but despite a refresh by Dexus in recent years, has a dated layout which will not be as favoured by tenants in the Brisbane market. The views from the building have been a key feature for occupants, however as Dexus proceeds with its plans for the Pier, the views from the Gold tower will ultimately diminish.
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