Dexus, Atlassian Sign Sydney HQ Deal

Australia’s biggest office tower owner Dexus has inked a giga deal to fund, develop and invest in the Sydney headquarters of the country’s tech juggernaut Atlassian. 

It has conditionally exchanged binding transaction documents with Atlassian in a move that is expected to kickstart construction of the $1.4-billion tower in coming months. 

The latest announcement follows Dexus entering into binding terms to provide a framework for the transaction in July last year. 

Atlassian’s mixed-use development proposal for its headquarters next to Central Station in Sydney’s tech central precinct was granted approval a few months later. 

The 40-level tower designed by ShoP Architects and BVN is to rise from a 3487sq m site at 8-10 Lee Street, Haymarket, and comprise 75,000sq m of gross floor area. 

It will include ground-floor retail and dining amenities, YHA backpackers accommodation and new public realm around Central Station. 

▲ An artist's impression of part of the Atlassian headquarters planned for Sydney.

Atlassian will occupy the 58,000sq m-plus of office space on the upper levels under a 15-year lease. 

Touted as a benchmark tower, it has been designed to achieve high sustainability outcomes for climatic control as well as the use of mass timber. 

The five uppermost floors of the building will provide an open-air environment for wellness facilities, meeting areas, lounge spaces, dining areas and planted terraces. 

In its latest ASX announcement, Dexus said it had worked with Atlassian to develop the design and progress negotiations with a number of third-party stakeholders to facilitate the development, including the NSW government on the project development agreement.  

It said it would fund 100 per cent of the project costs during construction through debt facilities and retain an estimated 60-65 per cent equity interest in the asset after refinancing and partial return of capital to Dexus.  

Dexus is also leaving the window open for the potential to introduce third-party capital into the project prior to completion. 

Under the deal, Atlassian will retain a 35-40 per cent share in the asset on completion. 

▲ Atlassian's Sydney headquarters are expected to be completed in 2026.

“This unique project will catalyse Sydney’s innovation and technology precinct, Tech Central, and set a new global benchmark in sustainability and smart workplace that challenges the status quo,” Dexus chief investment officer Ross Du Vernet said.  

“It has been a productive partnership over the past eight months in which we have worked with Atlassian to make their bold vision a reality, and we are looking forward to the long-term relationship.” 

Her said the transaction was subject to a set of conditions precedent prior to financial close, which is expected to be satisfied by mid-2022. 

Construction is expected to start shortly after with completion due in 2026.