DEXUS acquires stake in Woodside’s Perth HQ
DEXUS acquires stake in Woodside’s Perth HQ
Australian real estate investment trust Dexus announced that it has acquired a 49% interest in a holding unit trust that owns Capital Square Tower 1 at 98 Mounts Bay Road in Perth, for a total consideration of $339 million. Kevin George, Dexus Executive General Manager, Office said: “Capital Square is one of the leading workplaces in Australia,”
The vendor is a private group of investors, including the Malaysian-backed AAIG, which will retain 51% of the trust.
Dexus secured the property off-market and is paying $339 million for a 49% equity stake in Capital Square Tower 1, which has been externally valued at $970 million as of 30 June 2021 and has $450 million of senior secured debt. A portion of Dexus’s contribution will be utilised by the holding trust as a new receivable loan to the co-owner, to be repaid in four years. Dexus’s share in the loan receivable is approximately $77 million.
Capital Square Tower 1 is a Premium-grade office building located on a 13,418 square metre site in the Western precinct of the Perth CBD and comprising 60,635 square metres of net lettable area. The property was built in 2018 to accommodate Woodside Energy Limited’s headquarters and is 100% occupied with a weighted average lease expiry of 12.2 years (on settlement).
The deal reunites Dexus with its former tenant Woodside, which had opted to exit a smaller 40,000 sq m tenancy at the Dexus-owned 240 St Georges Terrace to move to the new tower three years ago.
Darren Steinberg, Dexus CEO said: “This acquisition enhances our portfolio with a high-quality landmark asset that we have secured at an attractive cash yield. This property is appealing for third party capital and will create an opportunity to grow our funds’ management business in the years ahead.”
Kevin George, Dexus Executive General Manager, Office said: “Capital Square is one of the leading workplaces in Australia, incorporating technologies and specifications supporting superior sustainability and customer experience outcomes. We are pleased to be able to manage the asset and reconnect with Woodside as a valued customer in our portfolio.”
Dexus said the acquisition price represents a 5.1% initial passing yield. ”It will be funded through debt facilities and will be accretive to Adjusted Funds From Operations and distribution per security for FY22.”
Under the terms of the deal, a portion of Dexus’s investment will be used by the property’s holding trust as a loan to the co-owner, to be repaid in four years. Dexus’s share in the loan is about $77 million. The acquisition price represents a 5.1 per cent initial passing yield.
It is the second major office Dexus has unveiled in less than a week after it committed to developing $1.4 billion Sydney headquarters for tech giant Atlassian, a distinctively designed, hybrid concrete and timber tower near Central Station.
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REFERENCES
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