Strong demand for $1.3bn Dexus office portfolio

Darren Steinberg

Dexus chief executive Darren Steinberg. Picture: Britta Campion

Property group Dexus has attracted strong bidding on the $1.3bn office portfolio it put on the block in August with the four-strong collection of Sydney buildings likely to be split up.

Dexus received stiff bids on the office towers with sales likely to be struck at or above book value, on CBD assets in particular, as more workers head back to their desks and the leasing market shows signs of stabilising.

The Dexus portfolio spans offices in the CBD, Pyrmont and Parramatta, with the properties being chased by local and international players.

The offering has drawn interest from Singapore’s ARA, Mapletree, and Keppel, as well as ­Germany’s Allianz, and local ­players AsheMorgan and Stadia Capital.

The Dexus portfolio comprises Sydney offices including a half share of 309-321 Kent St, in which Dexus will keep management, 383 Kent St, 100-130 Harris St in Pyrmont and 130 George St in Parramatta.

The buildings span more than 110,000sq m and splitting them up will likely attract a premium above the $1.3bn value.

Local groups are driving hard. Industry players said Charter Hall was in the field for 383 Kent and GPT was also after the Pyrmont asset.

The Parramatta building could go to a local player but offshore groups are also in the hunt for these buildings and are also chasing the half stake in the other Kent Street asset.

Both 383 Kent St and 130 George St have development potential. Agents Josh Cullen of Cushman & Wakefield and Rob Sewell of McVay Real Estate declined to comment.

The average portfolio occupancy is 98 per cent and each asset is underpinned by strong tenants. The buildings sit in markets that will directly benefit from major infrastructure projects.