Real estate group Dexus (ASX: DXS) has partnered with Singapore-based Mercatus Co-operative to acquire a 33.33 per cent interest in 1 Bligh Street, Sydney for $375 million.
Under the Mercatus Dexus Australia Partnership (MDAP), Mercatus will hold an indirect 90 per cent share in the joint venture with Sydney-based Dexus holding the remaining 10 per cent.
Post-acquisition Dexus will continue to manage the property and increase its effective ownership interest in the skyscraper to 36.66 per cent.
Situated in Sydney's CBD, 1 Bligh Street is a premium-grade, 29-storey building overlooking the Sydney Harbour and is 99.5 per cent occupied by major tenants including Clayton Utz, Bloomberg Australia and the Commonwealth Government.
Dexus CEO Darren Steinberg said the establishment of MDAP and the acquisition of the interest in the tower was consistent with the company's strategic initiative of expanding and diversifying the funds management business.
"This transaction demonstrates the ongoing strength of demand from international institutions for high quality Australian office asset exposure under Dexus platform management," Steinberg said.
The deal marks Mercatus' first foray outside of Singapore and into Australia.
"This acquisition is part of our strategy to diversify our portfolio and to generate sustainable long-term returns," Mercatus CEO Tan Ser Joo said.
"We are honoured to partner with Dexus, one of Australia's leading real estate groups, in our first direct real estate investment overseas."
Settlement of the acquisition is subject to Foreign Investment Review Board approval, with Dexus' interest funded from existing debt facilities.
Shares in Dexus are down 2.23 per cent to $9.19 per share at 10.15am AEDT.Never miss a news update, subscribe here. Follow us on LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.