DEXUS secures 39 Martin Place office tower sale

DEXUS Property Group and DEXUS Wholesale Property Fund have secured the windfall sale of the office tower at 39 Martin Place, Sydney.

The transaction follows the finalisation of negotiations relating to the compulsory acquisition of the property by Transport for NSW for the construction of the Sydney metro.

A total of $332 million will be received for the office tower and shopping circle, representing a premium to the property’s book value of $222.6 million at June 2016.

This is in addition to the exchange on the transfer of the leasehold interest in the Martin Place Shopping Circle which is expected to settle in late 2016.

Proceeds from the transaction will be used by DEXUS and DWPF to repay existing debt facilities.

DEXUS bought the property in 2012 for $143 million.

The 39 Martin Place premises were a B-Grade property located in a prominent position adjacent to Martin Place railway station, providing 14,525sqm of office accommodation (74% occupancy by income) over 20 levels together 1,816sqm of retail space (100% occupancy by income), comprising 6 retail shops with major anchor being Tiffany & Co.

The adjoining Martin Place Shopping Circle provides a further 805sqm of retail space as part of a convenient underground pedestrian link to the railway station.

The construction of 39 Martin Place was completed in 1972 and major refurbishments were completed in 1997 and 2011, with the latest including $15 million of improvements incorporating lift cars and the full refurbishment of six floors.

"The property presents DXS and DWPF with an attractive medium-term repositioning opportunity in a precinct being revitalised through the current refurbishment of neighbouring properties," DEXUS advised on acquisition.