Singapore-headquartered property investors, Mercatus Co-operative, have formed a joint venture with Australia’s Dexus Diversified Property Fund to invest in Australian office properties.
The Mercatus Dexus Australia Partnership (MDAP) launched this week with the announcement that it was acquiring Cbus Property’s 33.33% stake in 1 Bligh Street, Sydney, for A$375m.
Mercatus is one of the largest mall owners by floor space in Singapore and the company holds a portfolio of retail and office assets across the city state. The transaction marks Mercatus’ first acquisition outside of Singapore and its first foray into Australia. MDAP is structured to enable additional office acquisitions in the future.
Mercatus will be the majority partners in the new JV, holding 90%, with Dexus holding the remaining 10%.
Dexus is Australia’s largest owner and manager of office property and already owned a stake in 1 Bligh Street. Post-acquisition, Dexus’ effective ownership interest in the building rises to 36.66%. Despite being minority shareholders in MDAP, Dexus will act as the investment manager for the partnership and will continue to manage 1 Bligh Street.
Ms Tan Ser Joo, Mercatus’ Chief Executive Officer said, “This acquisition is part of our strategy to diversify our portfolio and to generate sustainable long-term returns. We are honoured to be able to partner Dexus, one of Australia’s leading real estate groups, in our first direct real estate investment overseas.”
Dexus CEO, 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.”
Dexus EGM, Funds Management, Deborah Coakley added: “We are pleased to have been able to work with Mercatus in securing their first direct real estate investment in Australia, while using our internal capabilities to close this transaction.”
1 Bligh Street is premium-grade, 29 storey building located in the heart of Sydney’s Central Business District. The building was co-developed by Cbus and Dexus and is 99.5% occupied with a weighted average lease expiry of 5.4 years. Major customers include Clayton Utz, Bloomberg Australia Pty Ltd and the Commonwealth of Australia.
Settlement of the acquisition is subject to approval by the Foreign Investment Review Board.
