Quintessential solidifies stance on office with One Margaret Street settlement

29 September 2023

Quintessential has settled the $293.1 million deal for One Margaret Street, Sydney, with Dexus. Melbourne-based Quintessential recently finalised an agreement for the 18-storey office tower in Sydney’s CBD on August 18 and has confirmed settlement for the sale.

It is Quintessential’s latest strategic acquisition and the fifth 100 per cent freehold acquisition in the Sydney CBD in the last five years.

Situated in a prime CBD location between the redeveloped Wynyard Station and the Barangaroo precinct, the office tower is set for major redevelopment as Quintessential pledges $90 million to refurbish and reposition the A-grade building with works set to commence in 2024.

The business plans on delivering a 10,000 sqm podium with typical floor areas of circa 1,850sqm NLA. The podium, external spaces and winter gardens are expected to reach completion in 2026 or early 2027.

Upgrading the services to create an all-electric building, the repositioning works will use low carbon embodied materiality, including green concrete, green reo and green steel to improve upon the already impressive 5.5 NABERS energy rating.

Quintessential continues to see premium-grade office space as a desirable asset with the potential to provide strong returns to investors especially where the amenity and tenant experience offered is able to help those businesses attract and retain the best talent.

Andrew Borger, Quintessential Chief Investment and Operating Officer said, “With recent inflationary pressures and higher input costs, new developments in Sydney will generally be challenging. Repositioning key strategic assets will be economically efficient and provide quality tenant accommodation by price point.”

“In a challenging market, we are pleased to have raised more than $200 million of equity and a senior debt facility via the Commonwealth Bank of Australia.”

“We look forward to collaborating with our new tenants and all relevant stakeholders to reimagine this outstanding property with a high ESG focus, building upon the strong tenant and investment demand for repositioned assets.”

“One Margaret Street is excellent value; we have acquired a prime quality asset at
$14,240 per sqm NLA with additional land at no value. We intend to add 4,000 sqm NLA to the asset, reflecting 20% additional area.”

Shane Quinn, Quintessential Executive Chair added, “We appreciate the support of our long-term loyal investor base and have welcomed many new investors who see the counter-cyclical opportunity in the market.”

“We have waited a long time to be able to acquire quality assets like 1 Margaret Street at such attractive pricing and below replacement cost. We think now is the time for creating intergenerational wealth and returns for investors at this point of the cycle.”

“We think the market is overpricing risk in well-located, A-Grade assets, which provides an opportunity for our investors to capitalise on.”

“Comparatively B-Grade and secondary assets are struggling to attract tenants, which has not yet been fully reflected in pricing.”

“Once repositioned, this will be a very attractive asset, particularly to institutional and foreign capital, seeking a 100% freehold interest.”