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Sydney-based real estate investment trust Dexus (ASX: DXS) is on track to making $230 million in transactions for two adjoining properties on Collins Street in Melbourne's CBD.
The company today announced it had exchanged contracts to acquire 60 Collins Street for $160 million, and had also entered into an agreement to buy the adjoining property on 52 Collins Street for $70 million.
The trust proposes to consolidate both sites across circa 2,000sqm and activate a prime grade office development in the medium term to activate a total of around 35,000sqm, subject to planning approval.
"These acquisitions provide us with a presence in the tightly held 'Paris end' of Collins Street in the Melbourne CBD," says CEO Darren Steinberg.
"They also present us with a unique opportunity to undertake an office development creating long term value for investors in the next supply cycle, in a prime location where we receive significant enquiry from our customer base."
Dexus' executive general manager for office and industrial, Kevin George, says there is "no better site" on Collins Street to deliver the latest generation of office space in the next supply cycle.
"We expect office demand in Melbourne to remain strong, with the vacancy rate to fall below 4% next year and remain well below long term averages for the foreseeable future," says George.
In a release, Dexus also highlighted recent completed developments such as 1 Bligh Street and more recently 5 Martin Place in Sydney, 480 Queen Street in Brisbane and Kings Square in Perth.
Projects currently under construction include 100 Mount Street in North Sydney, to be completed in early 2019 and 180 Flinders Street, Melbourne, to be completed in mid-2020.
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