Dexus Confirms $1.4bn Stake in Atlassian Tower

Dexus has confirmed it will fund, develop and invest $1.4 billion in Atlassian’s 40-storey timber tower headquarters in Sydney’s Tech Central precinct.

In a statement the ASX-listed landlord confirmed months-long industry speculation it had taken a stake in Atlassian’s timber tower that will anchor the tech precinct next to Central Station.

The development, on the 3487sq m site at 8-10 Lee Street, will comprise a 50-level office tower with retail amenities and a new YHA accommodation at its base.

It would also provide for a new public realm around Central Station.

Dexus chief executive Darren Steinberg said Atlassian would take a 15-year lease with a tenancy for its headquarters.

“The Atlassian tower is a great example of the future of workplace and is aligned with our purpose of creating spaces where people thrive,” Steinberg said.

“We look forward to welcoming Atlassian as a new customer and co-owner onto our platform and building out our developments within the Tech Central precinct.”

The project aims to achieve a 6-star NABERS Energy and 6-star Green Star design ratings.

New York-based SHoP Architects alongside Australian firm BVN are designing the timber tower for the wellbeing of its occupants with four-storey sections known as habitats to include naturally ventilated areas.

Dexus will act as development manager, funding 100 per cent of the project costs during construction, and retain a long-term equity interest in the asset.

The binding agreement is subject to planning and government approvals, which was expected at the end of this year, with construction to commence in 2022 and reach completion in 2026.

Dexus chief investment officer Ross Du Vernet said the acquisition increased the city-shaping development pipeline and provided appealing “risk-adjusted returns”.

“The exciting sustainability outcomes and initiatives championed at this development are consistent with our ambitions and will enable us to leverage this innovation across our broader platform,” he said.

Dexus will fund the costs of the development through debt facilities with the potential for third-party capital prior to completion. The development project will have no impact on Dexus’s Adjusted Funds From Operations or distribution per security in FY22.

The NSW government plans to attract more than 25,000 workers to the precinct.

The building will reach 180m high with a glass and steel facade and solar panels, along with planted terraces and natural ventilation.

A development application is yet to be lodged for the site.