Property and funds group Dexus and its main wholesale vehicle are putting the NBN headquarters in North Sydney on the block with the sale to provide a guide to prime office values.
The move comes as the listed group and the Dexus Wholesale Property Fund focus on recycling capital into higher returning opportunities, including developing next generation office projects.
While sales of large office towers have been subdued this year, billions of dollars worth of deals are being finalised as purchasers raise capital and vendors adjust to the cooler market.
Fresh sales of large towers are coming later this year after a quiet half that was hit by a combination of rising interest rates, higher office vacancy and uncertainty about corporate Australia’s return to office.
But the offer of the 100 Mount St tower via Knight Frank could help break the deadlock as it is one of the first premium-graders on the market. Dexus is partly banking on a series of agreed sales which it and Mirvac have underway in Sydney and Melbourne closing, shoring up investor confidence even as the value of towers dip.
The Mount St complex will hit the block as they bet that big international and local investors will chase the asset as home markets adjust to new pricing levels.
North Sydney is also set to be transformed by the opening of the Victoria Cross metro station, which has sparked a development boom in the area. Property heavyweight Stockland is looking for a capital partner on its planned $1.5bn office tower in North Sydney and rival developer Lendlease is in talks with parties about them taking a 25 per cent stake in the $1.4bn Victoria Cross Tower planned above the station.
100 Mount Street, North Sydney.
The prime Mount St complex is already almost fully occupied, while some development projects are struggling to lock down tenants.
Dexus and its fund were early movers in North Sydney, and in 2016 won the NBN out of a nearby tower to anchor the office complex when it was being built.
The NBN leased 20,364sq m, representing almost half the building, and has subleased a portion of that space to Hollard Insurance, improving the leasing profile. The tower is also occupied by Laing O’Rourke, which constructed the project.
The 36-level office and retail building includes five levels of basement carparking for 113 cars. The building comprises about 41,900q m of space and had at an estimated cost of $467.5m.
The Dexus unlisted fund invests in a diversified portfolio of office, industrial and retail properties. In 2021, it merged with AMP Capital Diversified Property Fund, and has since sold down assets to meet redemptions.
The 50 per cent interest held by Dexus was independently valued at $445m last December but this will have shifted out as interest rates have risen.
The DWPF is also selling the AM60 office tower in Brisbane for about $200m via CBRE. It picked up the 23-storey building, at 60 Albert St from LaSalle Investment Management for $161.3m in 2014.