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Dexus (ASX:DXS) acquires 49pc interest in Perth’s Capital Square Tower 1 for $399m
Capital Square Tower 1 is Woodside’s headquarters
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  • Dexus buys a 49pc interest in the holding unit trust that controls Capital Square Tower 1 in Perth for $399 million
  • Dexus said the office tower at 98 Mounts Bay Road was externally valued at $970 million as of June 30, 2021 and has $450 million on senior secured debt
  • Capital Square Tower 1 is a skyscraper with 60,635 square metres of net lettable space across 32 levels, located on a 13,418-square-metre site
  • Dexus CEO Darren Steinberg says the acquisition enhances their portfolio with a landmark asset that it has secured at an "attractive cash yield"
  • Shares in Dexus are down 0.43 per cent, sitting at $10.39 per share as of 3:28 pm AEST

For a total payment of $339 million, Dexus has bought a 49 per cent stake in a holding unit trust that controls Capital Square Tower 1 in Perth, home to Woodside.

Dexus said the office tower at 98 Mounts Bay Road was externally valued at $970 million as of June 30, 2021 and has $450 million on senior secured debt.

The holding trust will use a portion of Dexus' investment as a new receivable loan to the co-owner, which will be returned in four years. Dexus owns a $77 million portion of the loan receivable.

Capital Square Tower 1 is a premium-grade office skyscraper with 60,635 square metres of net lettable space across 32 levels, located on a 13,418-square-metre site in Perth's Western district.

The facility, which was completed in 2018 to house Woodside Energy Limited's headquarters, is fully leased with a weighted average lease expiration of 12.2 years (on settlement).

It is the first of three skyscrapers being built by Malaysian-backed developer AAIG on the Mounts Bay Road site of the former Emu Brewery.

The final two designs were approved in early 2020 after disputes with the Perth Local Development Assessment Panel,

Dexus CEO Darren Steinberg said the acquisition enhances their portfolio with a landmark asset that it has secured at an "attractive cash yield".

"This property is appealing for third party capital and will create an opportunity to grow our funds management business in the years ahead," he said.

The acquisition price represents a 5.1 per cent initial passing yield, will be funded through debt facilities and will be accretive to adjusted funds from operations and distribution per security for FY22.

Dexus executive general manager Kevin George said the office building is one of the leading workplaces in Australia, that supports sustainability and positive customer experience outcomes.

"We are pleased to be able manage the asset and reconnect with Woodside as a valued customer in our portfolio," he said.

It is the second office deal for the company this week, after entering terms with Atlassian to fund, develop, and invest in its new $1.4 billion headquarters.

Shares in Dexus are down 0.43 per cent, sitting at $10.39 per share as of 3:28 pm AEST.

DXS by the numbers
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