Dexus offloads Barangaroo office The Bond in $280m AsheMorgan deal
Dexus chief executive Ross Du Vernet.
Property group Dexus is set to become the latest to capitalise on the pick-up in the office market and is selling The Bond complex in Sydney for about $280m.
The building is in the sights of funds house AsheMorgan, which is in due diligence to buy the A-grade office tower in the Barangaroo precinct.
Dexus has been weighing up selling the block for more than a year and had earlier put rival groups into due diligence.
They were unable to close off deals as confidence in the office market was still weak.
However, this is starting to turn around quite quickly, with sales in train for both large assets and smaller value-add style buildings. The buyers are backing themselves to find new tenants at a time when incentives in many markets are coming down and inquiry levels are rising.
AsheMorgan is believed to be confident in its capacity to both attract capital for the purchase, which shows good metrics, and boost the leasing in the building.
The sale price is also above a previously held book value of about $260m, showing that buildings are starting to not only stabilise but rise in value when they are in attractive city corridors.
The sale price is also above a previously held book value of about $260m.
Large institutions are still selling down some assets in order to keep their gearing in check and smaller fund managers are in buy mode, along the eastern seaboard. The change in sentiment is partly driven by lower interest rates, which are driving down finance costs, and improving demand for property syndicates as investors flock to them as term deposit rates head down.
There is also less risk of office values falling again and the need for syndicates to come back to their investors in order to top up their equity .
The block, 30 The Bond, at 30–34 Hickson Road, was offered off-market in late 2023 in line with Dexus’s strategy of recycling capital into higher returning opportunities.
It had June 2023 book value of $354m but this dropped down to about $260m as interest rates were hiked.
The A-grade office tower sports a full height atrium providing an abundance of natural light. The nine-level building has glass lifts, suspended meeting rooms and open breakout spaces, as well as large floor plates providing workspace efficiency and flexibility. It sits close to the heart of Sydney’s Rocks precinct and benefits from a wide variety of restaurants, hotels, bars and cafés.
The block at 30 The Bond offers convenient and direct access to public transport. Wynyard Walk provides quick undercover access to trains and buses, while Barangaroo Ferry Wharf is just minutes from the doorstep.
Dexus this year offloaded a Melbourne office building Flinders Gate for $254.5m via CBRE.
