DEXUS acquires $435 million Perth offices

Buildings to be developed by Leighton Properties.

Real estate is on the rise. DEXUS Property Group (ASX: DXS) and its wholesale property fund announced today a $435 million joint venture purchase of three Perth CBD office buildings.

The A-grade properties will be developed by Leighton Properties (ASX: LEI), and are expected to pull a 9.9% blended unlevered 10-year internal rate of return. Internal rates of return are used as a discount method, and can generally be compared to a project’s growth rate.

This most recent acquisition follows last week’s announcement (see “Real estate on the rise“) that DEXUS will dole out $544 million for a soon-to-be-developed office in Brisbane CBD.

“The announcement of two strategic office investments worth approximately $1 billion in close succession demonstrates our team’s ability to source quality real estate in an environment where there are limited opportunities,” said CEO Darren Steinberg in a statement today. “DEXUS has demonstrated its ability over the past nine months to invest in quality office property across the spectrum through acquiring core and value-add opportunities and on a development fund-through basis.”

Located just outside the core CBD area, Steinberg estimates that its 25-35% lower rental entry point will make the offices extremely marketable to future tenants. 45% of the space has already been accounted for, and Leighton Properties has included a five-year income guarantee in DEXUS’ acquisition agreement.

Pending final details, the purchase should be completed by the end of the month. Construction will begin in July, and the offices are expected to be operational by mid-2015.

It’s easy enough to stick with sustainable large caps, but two of Australia’s most promising small companies are still flying under the radar. Discover these two exciting ASX investments in our brand-new special FREE report, “2 Small Cap Superstars”. Click here now, it’s free!

More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

More on ⏸️ Investing