Dexus to buy Teplitsky's Pyrmont building for $327.5 million

Listed property group Dexus has entered into an agreement to acquire the landmark heritage office building in Sydney’s Pyrmont for $327.5 million, the largest office transaction in the suburb’s history.

Dexus agreed a 100 percent freehold stake in 100 Harris Street at a fully leased yield of 5.4 percent. Among its tenants are co-working platform WeWork and Fairfax’s Domain. 

Originally a wool store from the 1890s, the refurbished heritage property comprises 26,879 sqm of A-Grade office space over six levels. 

The property sits on a 7,791 sqm site with frontages on both Harris Street and Pyrmont Street.

The sale was negotiated on behalf of Citi 100 by JLL’s James Aroney along with Karbon Property’s Joshua Watts. The property is owned by Ukrainian born property developer Michael Teplitsky.

Included in the offering is 130 Harris Street, to the south of the existing building, with new office and retail space and car parking.

The development will provide retail space fronting Harris Street is expected to be completed by October. 

The agents said demand for 100 Harris Street reflects an international movement to refurbished unique assets, with creative locations such as South of Market in San Francisco attracting a higher rate per sqm and tighter yields than their counterparts in the CBD.

The movement is following the trend of the tech industry that value brick and timber large floor plate workspaces, they said.

Karbon Property’s Joshua Watts said that Pyrmont is viewed as an extension of the CBD. 

100 Harris Street offered buyers an attractive weighted average lease expiry (WALE) of 7.6 years, he said.

“As a significant contributor to the Sydney fringe market, Pyrmont has been experiencing continuing strong rental growth, outperforming other office markets around the country,” Aroney said.

The Ukrainian-born property developer Michael Teplitsky listed its with expectations it could fetch $330 million.

Pyrmont is the technology hub of Sydney mirroring many international technology hubs including San Francisco’s South of Market, New York’s Meatpacking District and London’s Shoreditch where WeWork also has a presence.

Meanwhile the listed property group Dexus will raise $500 million for the purchase of a stake in Sydney's tallest office tower. 

Dexus will take a 25 stake in the MLC Centre at 19 Martin Place for $361.3 million with its wholesale property fund taking the other quarter share. 

The 68,289 square metre MLC tower at Martin Place was placed on the market by QIC Global Real Estate in March.