The new owner of a Sydney CBD office tower says it will spend $90 million on top of the $293 million it paid for the property to reposition the A-grade building.
Quintessential has been revealed as the buyer of the 18-storey One Margaret Street tower from Dexus, and was reportedly settled at a discount of around 21 per cent to the June 30, 2021 valuation.
The commercial property specialist said the asset was “ideally positioned between the redeveloped Wynyard Station to the east and the Barangaroo precinct to the west and above Sydney's primary subterranean pedestrian connection from the Barangaroo Wharf to Pitt Street”.
“With the substantial redevelopment budget, Quintessential plans to improve the quality of the finishes, amenities, and technology throughout the 18-level building, bringing it to a high A-Grade standard,” a spokesperson said
Working with the City of Sydney council to “deliver a product aligned to its strategic framework”, Quintessential said it would create a 10,000sq m podium with typical floor areas of 1850sq m of net leasable area (NLA), “breathing external spaces and winter gardens in excess of 1000 square metres”.
It plans to begin work on the upper floors next year, with the plant to be upgraded to create an all-electric building.
Following planning approvals, the new owner plans to deliver the podium upgrade in 2026-27 “when there is a void in new supply for quality A-grade space”, according to Quintessential.
“The repositioning work will build upon the current impressive 5.5 NABERS energy rating, using low carbon embodied materiality, including green concrete, green reo and green steel to complete the works.”
The sale of One Margaret Street was negotiated by the CBRE team of Flint Davidson, James Parry, Andrew Hunter and Michael Andrews, and Adam Woodward and James Mitchell from Colliers.
Last week Dexus posted a weighty 147 per cent drop in profit for the 2023 financial year.
The statutory net loss after tax of $752.7 million compares to a statutory net profit after tax of $1.615 billion in the 2022 financial year.
This was primarily driven by $1.183 billion of fair valuation losses on investment property on the back of capitalisation rates softening across the portfolio, compared to $926 million of fair valuation gains recognised in the prior year, Dexus said.
