DEXUS today announced that they have settled with Stockland to acquire Waterfront Place and Eagle Street Pier located within the prime commercial precinct of the Brisbane CBD known as the “Golden Triangle”.
DEXUS has jointly agreed to each acquire a 50% interest in:
- Waterfront Place at 1 Eagle Street, Brisbane comprising a 59,448 square metre Premium grade office tower, and
- Eagle Street Pier, at 45 Eagle Street, Brisbane comprising a 6,258 square metre prime riverfrontretail precinct
The acquisition price of $635 million reflects an attractive $9,664 per square metre for the complex and a capitalisation rate of 6.9%.
Darren Steinberg, DEXUS CEO said: “This acquisition is an excellent long term core investment for both DEXUS and DWPF, and Eagle Street Pier offers one of the best future development sites in the Brisbane CBD. It builds on our established presence in the Brisbane CBD office market, enabling us to leverage our expertise in a market where we have been able to demonstrate leasing success despite subdued conditions.
“Waterfront Place complements our ownership of 480 Queen Street in Brisbane and reinforces our role as a workspace partner for our customers in Brisbane, as Prime grade office product attracts strong tenant appeal in a recovering leasing market.”
Penny Ransom, DWPF Fund Manager said: “We are excited by the opportunity to acquire this strategic, long term asset. For DWPF, this acquisition will be part-funded through raising further equity, following our successful raising earlier this year that was well oversubscribed.”
Of the occupied area at Waterfront Place, 68% comprises existing tenants within DEXUS’s portfolio, providing the opportunity to further strengthen these established relationships.
Kevin George DEXUS’s Executive General Manager of Office & Industrial said: “Waterfront Place is currently 90% leased and pleasingly, we have already received some enquiry to lease office space since the market began speculating on this acquisition. Now that a conditional agreement has been reached we can progress leasing discussions.”
Commenting on the sale, which was first announced on the ASX June 22, 2015, Managing Director and CEO of Stockland Mark Steinert said, “The sale of our interest in Waterfront Place and Eagle Street Pier reflects our strategy to selectively down-weight our exposure to office at this point in the cycle and recycle capital into other accretive opportunities.”
“This strong outcome reflects the success of our joint-venture with the Future Fund to execute leasing contracts to improve the WALE and associated market value of the asset.”
Stockland acquired the office tower in February 2004 and has invested approximately $171 million, including the cost of additions, in its 50 per cent stake. The other 50 per cent interest in the property was placed into a Stockland managed retail fund and subsequently sold to the Future Fund in 2011, after which the fund was wound up.