A Chinese investor has purchased half of a prime Dexus office asset for $925 million, in the largest commercial deal of 2020.
The Chinese Investment Corporation struck a deal with the property giants for a 50% stake in Grosvenor Place, a 44-level premium grade office tower in Sydney’s CBD.
The transaction is a landmark deal for the commercial market at a time when the future of the office sector is somewhat up in the air.
Australia’s largest office landlord announced that the funds will be put towards its growing diversified portfolio, with the $2.5 billion Tech Central project opposite Central Station high up on Dexus’ priority list.
Dexus Chief Investment Officer, Ross Du Vernet said that the decision to sell its 50% stake in Grosvenor Place was part of a wider plan to reduce the company’s portfolio leasing risk.
“This transaction continues our asset recycling strategy, realising value for both Dexus and our Dexus Office Partner,” he said.
The sale further strengthens our balance sheet and enables us to organically fund higher return growth initiatives in our funds and development businesses.
The Harry Seidler designed office tower was built in 1988 and features ground floor retail facilities with settlement for the asset expected in the early stages of 2021.
Current tenants of the building include Deloitte and Wilsons Parking, and as of June 30 has an occupation rate of 89%.
Mr Du Vernet went on to say that the funds would initially be used to repay debt and that moving forward the extra capital would give the company more flexibility to take on new business ventures.
“It also provides improved capacity to undertake capital management initiatives should there be a continued disconnect between public and private markets,” he said.