Dexus executed the $3.7 billion CPA transaction in April 2014 and formed the Dexus Office Partnership with capital partner, Canada Pension Plan Investment Board.

Dexus approach

  • The partnership’s portfolio was fully integrated onto the Dexus platform by July 2014
  • Dexus undertook an active approach to leasing, including:
    • adding a lobby café at 175 Pitt Street to generate additional income, and enhance customer amenity 
    • repositioning the leasing approach at 5 Martin Place and 60 Castlereagh Street in Sydney    

Value created

  • The property portfolio exceeded original performance assumptions, delivering a 12.7% unlevered total return for the 12 months to 30 June 2015
  • Dexus’s investment in the Office Partnership delivered a 20.4% levered return to Dexus for the year
    • improved occupancy of the portfolio from 92.2% at acquisition to 94.6% at 30 June 2015
    • secured Challenger at 5 Martin Place, increasing pre-committed office space at the development from 41% at acquisition to 75%, and at 30 June 2015 was 82% committed
    • increased property values by $182.4 million (at 100%)
    • portfolio cap rate tightened from 7.24% to 6.99%