Dexus is spending $230 million to acquire two neighbouring assets (outlined, top) at the eastern end of Melbourne’s Collins Street – with plans to build a new office complex.
The Sydney-based fund manager and developer is paying the Reserve Bank of Australia $160 million for a 15-storey, 13,817 square metre office at 60 Collins Street, on the north-east corner of Exhibition Street, which hit the market in August.
Dexus is also spending $70 million for the neighbouring 52 Collins Street following an off-market deal. This asset, containing an 11-storey, 3454 sqm office, is being offloaded by syndicate Marks Henderson Funds Management which paid $33.1 million for it in 2015.
Confirming the acquisitions in this statement – Dexus said it plans to replace the circa-2000 square metre combined land holding with a premium-grade office development containing some 35,000 sqm of building area.
The company’s development manager, Kevin George, said “there is no better site in Collins Street to deliver the latest generation of office space in the next supply cycle. We expect office demand in Melbourne to remain strong, with the vacancy rate to fall below 4 per cent next year and remain well below the long term averages for the foreseeable future.
The sites are opposite two new buildings under construction by QIC around its 80 Collins Street, which was formerly known as Nauru House.
In late August it was reported QIC was considering selling this trio of properties – two offices and a hotel – a deal which could reap it about $1.8 billion.