1 Bligh Street
01 Property Details
|Address||1 Bligh Street, Sydney|
|NLA (sqm)||83,074 sqm|
|Buyer||Dexus JV Mercatus|
|Deal Structure||33.33% Trust Interest|
02 The Challenge
The Sydney CBD office market has enjoyed falling vacancy, solid rental growth and strong investment demand for a number of years. The COVID 19 pandemic changed that, economic uncertainty and disruption reducing demand from both occupiers and investors for much of 2020.
Occupier demand was impacted by falling employment, cost cutting and a rise in flexible working which resulted in a sharp increase in the vacancy rate. The weaker market conditions have also led to rental incentives rising from around 20% to now approaching mid-30s. While markets are beginning to normalise, the disruption is likely to continue until the pandemic is contained.
03 The Solution
Cushman & Wakefield was appointed as a joint-sole agency to sell the property. Co-developed by Cbus Property in 2011, 1 Bligh Street in Sydney’s CBD set a new benchmark for commercial tower developments for the decade, achieving the Green Building Council of Australia’s first 6 Star Green Star Office Design V2 certified rating in Sydney and a market-leading 5.5-star NABERS Energy rating, representing world leadership in sustainable design.
In addition, 1 Bligh Street benefits from improved transportation network as well as both public and private infrastructure development in Sydney and in the immediate area.
04 The Result
1 Bligh Street achieved a high occupancy rate of 99.9% at the time of transaction, with secure cashflows underpinned by one of the most prestigious tenant bases in Sydney. CEO of Dexus, Darren Steinberg, said: “This transaction demonstrates the ongoing strength of demand from international institutions for high-quality Australian office asset exposure under Dexus platform management.”
Adrian Pozzo, CEO of Cbus Property, also mentioned: “This transaction forms part of our ongoing strategy to recycle capital into our future investment and development portfolios, and to pursue other major opportunities for the business across Australia.”