Sydney office block sold at 16% discount due to rates and remote working impact.

Breaking News: Australian Real Estate Firm Sells Office ‌Building in Sydney

By ⁣Lewis⁢ Jackson and Rishav Chatterjee

Sydney’s real estate ⁤market is buzzing with the news ⁣that ⁢Australian ⁤firm Dexus has sold⁢ an office building in downtown Sydney. The buyer managed⁤ to secure a 16% discount on the property’s 2022 valuation, taking advantage ​of higher⁤ interest rates⁢ and ​the rise of remote working ‌that ‌has ‍impacted office space prices.

According to Reuters, Dexus, one⁢ of Australia’s largest landlords, recently signed ‍a conditional⁢ deal‍ to sell its Margaret Street building in Sydney’s central business district. This move comes⁤ as the property industry, especially office building owners, face challenges‌ due to ⁤the shift towards remote work and e-commerce. These factors have led tenants to reconsider their ‍office space ‌needs, while higher interest ‍rates have impacted building values and debt servicing costs.

The 18-story A-Grade office was sold⁣ for A$293.1 million ($188 million), representing‍ a ⁢16.3% discount from its December ⁢2022⁣ valuation. The buyer, Quintessential Equity, an Australian property developer and investor, announced ‌the purchase on‌ its website without providing further details. ‌Dexus will retain a⁤ A$50 million stake in the trust that will hold ‍the⁢ property,⁣ as⁤ stated in ⁤their official statement.

This is not the first time Dexus has made such a ‌sale.‌ In June, they sold another premium office‌ building in​ Sydney’s central business district for A$393.1‌ million, at a discount of nearly 17% compared to an independent valuation made‌ in December.

Dexus CEO Darren Steinberg ​emphasized⁤ that forced‌ sales were not on the​ table, as the company⁤ has secured enough financing from banks and recent ⁢note issues to fund its pipeline.⁣ They will only sell assets to generate cash for higher-yielding projects.

($1 = 1.5613 Australian dollars)

(Reporting⁢ by ⁢Lewis Jackson in Sydney and ⁢Rishav Chatterjee ‌in Bengaluru; Editing by Subhranshu Sahu, Rashmi Aich and⁣ Sam Holmes)

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