The country's largest office landlord Dexus has cashed in on an A-grade office tower in the city's financial district.
Singapore-headquartered fund manager Peakstone picked up the 32,000sq m commercial building, located at 45 Clarence Street on western corridor of the CBD, for $530 million.
Dexus chief executive Darren Steinberg said the move signalled the resilience of prime-quality office asset values in the Sydney CBD.
The final figure surpasses a $507 million valuation undertaken pre-Covid on the 30-year-old Mirvac-built building.
The office tower is fully-occupied and currently holds a weighted lease term by income of 3.3 years.
The transaction will be a welcome shot-in-the-arm for the beleaguered office sector and provide some needed confidence for landlords facing economic uncertainty as many businesses begin to move staff back to the office.
Deals have dried up across prime markets with an 81 per cent drop off in transactions over the first quarter of the year—the lowest quarterly volume since 2012.
Dexus will now recycle the raised capital into higher returning opportunities that its expect will become “more prevalent” over the coming period.
The ASX-listed developer, along with joint venture partner Frasers Property Australia, are also moving ahead with $2.5 billion plans for two towers at Sydney’s Central Station.
The post-pandemic recovery in Sydney's CBD will be further supported by the state government’s plans to reignite the infrastructure boom.
The NSW government estimates that $13 billion in economic benefit will be injected into the economy, while delivering 8,000 new homes, infrastructure and public space.