The Dexus Property Group (ASX: DXS) share price is slipping today following the sale of one of its properties. In early afternoon trade, the leading Australian real estate group's shares are fetching for $9.56, down 1.39%.
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What did Dexus announce?
Investors are selling off their positions in Dexus shares after the company updated the market with its latest asset divestment.
According to its release, Dexus advised it has sold its office tower located at 10 Eagle Street in Brisbane to Marquette Properties. The conditional contracts were exchanged between both parties on 1 April 2021. The asset is owned by a subsidiary, Dexus Office Partnership, which holds a 50% interest in the building.
Built in 1978, the office tower comprises of 27,800 square meters over 34 levels, hosting A-grade offices. Situated in the heart of the Brisbane's 'Golden Triangle', the property retained a 92% occupancy rate with a WALE of 2.9 years. WALE refers to a common commercial property term as 'weighted average lease expiry'. Key customers in the building include AEMO, Wilson Parking, and Accenture.
The sale will realise proceeds of $285 million before transaction costs, and will be used to repay Dexus' outstanding debt. Settlement is expected to occur sometime in May 2021.
Management commentary
Dexus chief investment officer Ross Du Vernet commented:
This transaction continues our asset recycling strategy, realising value for both Dexus and our Dexus Office Partner while reducing our exposure to the Brisbane market. It also provides us with an excellent opportunity to focus our leasing, asset management and development capabilities on advancing our city-shaping development project at Waterfront Brisbane.
Marquette managing director Toby Lewis added:
As a Brisbane-based and focused investment firm we are thrilled to be acquiring one of Australia's best known office towers. We are acquiring a great asset with an excellent tenancy profile due to Dexus's best-in-class management. Despite the ongoing long-term uncertainty associated with the COVID-19 pandemic, we have enabled more than 150 Australian families to invest in 10 Eagle Street and look forward to delivering strong returns as Brisbane continues to grow as a city and a city to invest in.
Dexus share price summary
The Dexus share price has gained around 6% over the past year, but is relatively flat since the beginning of 2021. The company's shares reached a 52-week high of $10.24 last June, before wobbling for the remaining period.
At current valuations, Dexus presides a market capitalisation of roughly $10.2 billion, with 1.07 billion shares outstanding.
