Dexus Property Group move to progressively fund the development pipeline after an announcement that it has entered into agreements to sell two investment properties.
The properties going to market are the Southgate Complex in Melbourne and 108 North Terrace, Adelaide.
Dexus CEO Darren Steinberg said the sales demonstrate a willingness to capitalise on the continued strength of investor demand for quality properties.
“The proceeds of all sales will initially be used to repay debt and will progressively fund projects in Dexus’ pipeline of development opportunities.”
Southgate Complex, MelbourneDexus has entered into an agreement with ARA Asset Management, according to the Australian Financial Review, to sell its 100 per cent interest in the Melbourne Southgate Complex across two equal tranches for net sale proceeds of $578 million.
The sale is subject to the purchaser receiving FIRB approval, with settlement of the initial 50 per cent tranche expected to occur in the December 2016 quarter.
The remaining 50 per cent tranche is expected to settle on or after 31 July 2017.
Dexus Chief Investment Officer Ross Du Vernet said “this transaction is an excellent opportunity for us to divest one of our office properties at a significant premium.”
He believes it will book value at what they believe is an opportune time, following recent leasing success and the receipt of several unsolicited offers.
Gross proceeds achieved for the sale of 108 North Terrace, Adelaide are $86.5 million and settlement is expected to occur on 7 September 2016.
108 North Terrace, AdelaideIts sale is a move in line with DEXUS’s strategy of divesting assets from non-core markets, enabling the property group to focus on its core office markets of Sydney, Melbourne, Brisbane and Perth. It is a move that has also seen the sale of 36 George Street, Burwood late last year and the recent sale of Dexus' interest in the Zenith in Chatswood.
Dexus will continue to manage the property until final settlement.