GPT, Dexus Make Moves in Sydney Office Sector

Listed property giant GPT Group has plans to offload a quarter interest in a landmark Sydney asset for $585 million, as the city’s office sector forges a path forward from the disruption of the pandemic.

GPT’s divestment of 1 Farrer Place comes as Dexus announced it has conditionally exchanged contracts to sell its North Sydney office tower for $273 million, just above its book value.

Prompted by unsolicited offers, the 60 Miller Street property changed hands in an off-market process to Hong Kong group Huge Linkage.

While the net sale proceeds will be used to repay debt, Dexus chief investment officer Ross Du Vernet said there was demand in the private sector of A-grade assets.

“This transaction reinforces private market demand for quality office assets in Australia’s gateway cities,” Du Vernet said in a statement.

“The sale improves portfolio composition and enables us to organically fund growth in our development and funds management businesses while preserving capacity for further capital management initiatives.”

The A-grade, 17-storey Miller Street office tower spans ground floor retail across 19,350 sq m, in the centre of North Sydney’s financial district.

Anchored by Covermore and Flight Centre, the property was 97 per cent occupied as of the end of June. Settlement is subject to FIRB approval and is expected mid-next year.

Also making moves in the Sydney office sector, GPT Group announced on Monday it will offload its 25 per cent interest in 1 Farrer Place in Sydney’s CBD.

Valued at around the $2.3 billion mark, the address spans the Governor Phillip and Governor Macquarie Towers.

The sale is subject to pre-emptive first right arrangements with co-owners Lendlease, which also owns a 25 per cent interest in the expansive site, and Dexus which owns the remaining half share.

As of the end of June, the 25 per cent share reflected $585 million.

GPT’s chief executive officer Bob Johnston said the property would likely attract both domestic and offshore investors.

“Farrer Place is one of Australia’s most iconic office assets attracting high quality tenants.

“It is rare for opportunities of this quality to be offered to the market and we expect it will be well sought after by both domestic and offshore investors.”

Should a sale be successful, GPT expects to re-invest the proceeds, which would include the Group’s logistics development pipeline.