Dexus, GIC form JV to acquire interest in Rialto Towers Melbourne

Dexus, GIC form JV to acquire interest in Rialto Towers Melbourne
Rialto Towers Melbourne

Australia’s real estate group Dexus and Singapore’s sovereign wealth fund GIC have formed a joint venture(JV) to acquire a 50% interest in Rialto Towers, an office building located on 525 Collins Street in Melbourne, Australia for A$644 million.

GIC will hold a 90% share in the JV and Dexus will hold the remaining 10%. Dexus is the investment manager of the joint venture and has been appointed as the manager of the entire Rialto Towers complex.

Rialto Towers is an iconic prime-grade, 55 storey building, and is one of the largest office buildings located in Melbourne’s Central Business District. It is well located on Collins Street with good access to transport and other key amenities. The property is 91.7% occupied with a weighted average lease expiry of 4.6 years as at 1 March 2020.

Rialto Towers is expected to benefit from the positive supply-demand dynamics of Melbourne’s office market over the long term.

Dexus CEO, Darren Steinberg said: “We are pleased to continue to grow our relationship with GIC, enabling them to extend their investments into the Australian office market. In the current environment, we are focused on business continuity, and pleasingly were able to close this off-market transaction within our targeted timeframes.”

The property is expected to settle in May 2020 (subject to FIRB approval), with Dexus’s interest funded from existing debt facilities.

This transaction follows the settlement of GIC’s additional investment in the Dexus Australian Logistics Trust, announced to the Australian Securities Exchange on 1 April 2020.

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