Dexus has acquired a 49% interest in a holding unit trust that owns Capital Square Tower 1, a premium-grade office building at 98 Mounts Bay Road in Perth, for A$339 million.
Dexus said Capital Square Tower 1 has been externally valued at $970 million as at 30 June 2021 and has $450 million of senior secured debt.
A portion of Dexus’s contribution will be utilised by the holding trust as a new receivable loan to the co-owner, to be repaid in four years. Dexus’s share in the loan receivable is approximately $77 million.
Capital Square Tower 1 is located on a 13,418 square metre site in the Western precinct of the Perth CBD and comprising 60,635 square metres of net lettable area.
The property was built in 2018 to accommodate Woodside Energy Limited’s headquarters and is 100% occupied with a weighted average lease expiry of 12.2 years (on settlement).
Darren Steinberg, Dexus CEO said: “This acquisition enhances our portfolio with a high-quality landmark asset that we have secured at an attractive cash yield. This property is appealing for third party capital and will create an opportunity to grow our funds management business in the years ahead.”
Kevin George, Dexus Executive General Manager, Office said: “Capital Square is one of the leading workplaces in Australia, incorporating technologies and specifications supporting superior sustainability and customer experience outcomes. We are pleased to be able to manage the asset and reconnect with Woodside as a valued customer in our portfolio.”
Dexus said the acquisition price represents a 5.1% initial passing yield. ”It will be funded through debt facilities and will be accretive to Adjusted Funds From Operations and distribution per security for FY22.”