Dexus, Australia’s largest office building landlord, exchanged contracts to acquire a 50 per cent interest in the Rialto Towers in Melbourne’s CBD for $644 million.
GIC will hold a 90 per cent share in the joint venture and Dexus will hold the remaining 10 per cent, with the Collins Street purchase owned alongside the family owned Grollo Group.
The latest acquisition puts the 525 Collins Street Rialto Towers value at around $1.29 billion.
Dexus is the investment manager of the joint venture and appointed as the manager of the entire Rialto Towers complex.
Dexus chief executive Darren Steinberg said that in the current Covid-19 environment the group is “focused on business continuity”.
“And pleasingly were able to close this off-market transaction within our targeted timeframes.”
The move also adds to Dexus’s relationship with GIC, which Steinberg said enables “them to extend their investments into the Australian office market”.
In late 2018 Dexus struck a deal with GIC to create a $2 billion logistics property trust.
“In these times of elevated uncertainty Dexus continues to focus on preserving capital while selectively investing in assets with long-term value and strong fundamentals,” Steinberg said.
The 55-storey building is 91.7 per cent occupied with a weighted average lease expiry of 4.6 years as at 1 March, and was struck on a yield of around five per cent.
The 525 Collins Street asset is slated to settle in May subject to FIRB approval.
Dexus’s interest in the Rialto Towers asset will be funded from existing debt facilities.