Sydney tower home of NBN’s headquarters put on the market by asset group Dexus

Listed property group Dexus and its flagship wholesale fund are selling 100 Mount Street in Sydney.

The recovery of North Sydney’s office market is to be tested with the offer of the NBN headquarters building that is tipped to sell for close to $600m.

The move to sell 100 Mount Street by listed property group Dexus and its flagship wholesale fund comes as the tech company prepares to move out to a nearby tower that Lendlease is building.

The offer is partly timed to capitalise on an expected recovery in the market, which could see tenants vie for prime space once the Victoria Cross Tower is filled up as most office projects planned in the area have been scrapped.

Large developers have all but abandoned plans for new towers in North Sydney due to the difficulty in securing major pre-leases and soaring costs that have hit the development.

The sale is being handled by real estate agencies CBRE and Cushman & Wakefield and could benefit from more certainty about the departure of the NBN.

The tower was almost sold to international funds manager Hines last year. But a deal did not go ahead as NBN was yet to commit to the Lendlease project, which has recently won more ­tenants.

The larger shift in the market has been the rise of residential developers that have forged into North Sydney, often converting office schemes into residential projects.

GPT’s wholesale office fund ditched plans for an office skyscraper and sold its site to residential developer Freecity, which is planning a mixed-use project. Others going down this path range from financial services company Zurich and Chinese-backed developer Aqualand, while other landlords – including listed property major Stockland – are exploring their options.

The difficulty of getting new projects off the ground comes as demand is picking up on the back of the new Victoria Cross Metro Station, which is expected to prompt a squeeze on space in coming years.

CBRE’s James Parry, Flint Davidson and Stuart McCann together with Cushman & Wakefield’s Josh Cullen, Mark Hansen and Bridhe Woods are handling the sale.

The asset is the only premium-grade office block to be offered in North Sydney but M&G’s 25 per cent stake in Coca Cola Place in Mount Street in North Sydney is also on offer.

Dexus developed the block in 2019 and it comprises 41,500sq m of office space across 35 levels. It sports tenants including Hollard Insurance, Laing O’Rourke, First Data Resources and Chanel, views of Sydney Harbour, the Harbour Bridge and the Sydney CBD.

Mr Parry said North Sydney’s office market was experiencing unprecedented tenant demand, predominantly from tenants outside the market. Since 2023, 24 new tenants have shifted into the area, accounting for about 36,000sq m of space, as the area’s remaining blocks are rejuvenated. “Set against this, new supply is at the lowest level in decades, with this year’s completion of the Victoria Cross over-station development expected to mark the last premium office development in North Sydney for many years,” Mr Parry said.

Mr Cullen said that premium office assets remained tightly held and were increasingly difficult to access in the current market – particularly full ownership interests, which are exceptionally rare.

“Investor appetite for core assets remains strong, driven by strengthening tenant demand for premium space,” he said.

Fast-moving funds managers are already moving in, with Forza Capital close to buying the block at 100 Pacific Highway from super fund manager ISPT.