China SWF to Take Majority Stake in Grosvenor Place, Sydney
Posted on 11/18/2020
ASX-listed Dexus Group has conditionally exchanged contracts to sell a 50% interest in Grosvenor Place, Sydney. The 50% interest comprises 25% owned by Dexus and 25% owned by the Dexus Office Partnership, in which Dexus holds a 50% interest. The sale will realize total net proceeds of $925 million for the 50% interest or $694 million for Dexus, representing a circa 5% discount to the property’s book value at June 30, 2020, reflecting the current vacancy, short term leasing risk in the asset, and reflecting the impact of the coronavirus crisis. Dexus held 37.5%, with the Canada Pension Plan Investment Board (CPPIB) at 12.5%.
The purchaser, the Chinese Investment Corporation (CIC), is an existing co-owner of the property and the sale is subject to FIRB approval, with settlement expected in early 2021.
CIC’s initial interest in the George Street office tower was bought from the Investa office portfolio in 2015. The tower will be 75% owned by CIC.
Grosvenor Place is a 44-level, office tower with ground floor retail, designed by Harry Seidler and built in 1988. The property interest is leasehold with 78 years remaining on the ground lease. Major tenants include Deloitte and Wilsons Parking. Dexus acquired an initial interest in Grosvenor Place in 2013, with the investment generating an unlevered annualized total return of roughly 12% since acquisition.