Dexus establishes new JV to acquire interest in Rialto Towers Melbourne
6 April 2020
Dexus establishes new JV to acquire interest in Rialto Towers, Melbourne
Dexus today announced the establishment of a new Joint Venture (“JV”) with GIC that has exchanged contracts to acquire a 50% interest in Rialto Towers, 525 Collins Street, Melbourne, for $644 million1.
GIC will hold a 90% share in the JV and Dexus will hold the remaining 10%. Dexus is the investment manager of the JV and has been appointed as the manager of the entire Rialto Towers complex.
The establishment of the JV and acquisition of Rialto Towers is consistent with Dexus’s strategic objective of being a wholesale partner of choice, providing the group with a breadth of capital sources through economic cycles.
Dexus CEO, Darren Steinberg said: “We are pleased to continue to grow our relationship with GIC, enabling them to extend their investments into the Australian office market. In the current environment, we are focused on business continuity, and pleasingly were able to close this off-market transaction within our targeted timeframes.”
Rialto Towers is an iconic prime-grade, 55 storey building, and is one of the largest office buildings located in Melbourne’s Central Business District. It is well located on Collins Street with good access to transport and other key amenities. The property is 91.7% occupied with a weighted average lease expiry of 4.6 years as at 1 March 2020. Rialto Towers is expected to benefit from the positive supply-demand dynamics of Melbourne’s office market over the long term.
The JV increases third party assets under management and reinforces Dexus’s ability to secure and transact high quality opportunities off-market.
In these times of elevated uncertainty Dexus continues to focus on preserving capital while selectively investing in assets with long-term value and strong fundamentals.
The property is expected to settle in May 2020 (subject to FIRB approval), with Dexus’s interest funded from existing debt facilities.
This transaction follows the settlement of GIC’s additional investment in the Dexus Australian Logistics Trust, announced to the Australian Securities Exchange on 1 April 2020, and further strengthens Dexus’s growing relationship with GIC.
Authorised by Brett Cameron, General Counsel and Company Secretary of Dexus Funds Management Limited.
- Reflecting the net acquisition price for the 50% interest in Rialto Towers (of which GIC will hold a 90% share and Dexus a 10% share) and excludes acquisition costs, incentives and other costs.