- Dexus Group is to fund 100% of the project
- The 40 level office will focus on sustainability
- Dexus will retain 60-65% equity post-construction after refinancing
Real estate investment trust Dexus is set to fund, develop and invest in software company Atlassian’s new Sydney headquarters after conditionally exchanging binding transaction documents.
The development is located at 8-10 Lee Street, a 3,487 sqm site within the State Government-led Tech Central precinct, neighbouring the Central Place Sydney development.
The development will form a market-leading 40-level office tower with a focus on sustainability.
Spanning circa 75,000 sqm of gross floor area, the tower will offer retail amenities and new YHA accommodation space at its base. The surrounding area will comprise a new public realm near Sydney’s Central Station.
Atlassian will occupy the office accommodation under a 15-year lease.
The news of binding transaction documents comes following a binding terms agreement announced in July 2021. Since then the two companies have worked together in developing the design and processing negotiations with several third-party stakeholders.
Dexus Chief Investment Officer Ross Du Vernet has indicated that the partnership so far has been fruitful.
“This unique project will catalyse Sydney’s innovation and technology precinct, Tech Central and set a new global benchmark in sustainability and smart workplace that challenges the status quo.
Ross Du Vernet, Dexus Chief Investment Officer
“It has been a productive partnership over the past eight months in which we have worked with Atlassian to make their bold vision a reality, and we are looking forward to the long-term relationship,” he said.
Under the agreement, Dexus Group is to fund 100% of the project costs during construction through debt facilities. The company will retain an estimated 60 – 65% equity interest in the asset on completion after refinancing and partial return of capital to Dexus. Atlassian will maintain around 35 – 40% interest in the asset once completed.
There is also a potential for third party capital to be brought into the project preceding its completion.
The project is estimated to reach costs around $1.4 billion.
The new agreement is subject to financial close which is expected to be satisfied by mid-2022, with
Construction is expected to begin mid-2022 shortly after the conditions of the new agreement are met.
Completion is expected in 2026.
Dexus has assured shareholders that the project will have no impact on the Adjusted Funds From Operations or distribution per security in FY22.
