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News release

SYDNEY

JLL negotiates 100 Harris Street deal for $327.5 million

The sale of this A-grade office asset is the largest office transaction in Pyrmont’s history.


​Dexus (ASX: DXS) has entered into an agreement to acquire the landmark heritage office building at 100 Harris Street in Sydney's Pyrmont for $327.5 million.

The sale was negotiated on behalf of Citi 100 by JLL's James Aroney, Rob Sewell and Simon Storry, as well as Karbon Property's Joshua Watts.

Dexus agreed a 100% freehold stake in 100 Harris Street for $327.5 million at a fully leased yield of 5.4%

JLL's Head of Office Investments - Australia, Rob Sewell said, "We saw significant investor interest in 100 Harris St with over 30 formal inspections. The deep investor pool had both international buyers and domestic institutions. The yield achieved reflects the strong interest and huge demand that 100 Harris Street attracted.

"The demand for 100 Harris Street reflects an international movement to refurbished unique assets, with creative locations such as South of Market in San Francisco attracting a higher rate per sqm and tighter yields than their counterparts in the CBD. This movement is following the trend of the tech industry that value brick and timber large floor plate workspaces.

"There is continuing demand for office assets in Sydney and very few major, A-grade commercial assets on the market at the moment. The unique heritage appeal of this property and its excellent tenants, including WeWork and Domain, made 100 Harris Street such an attractive buy," said Mr Sewell.

Karbon Property Director Joshua Watts said, "Pyrmont is viewed as an extension of the CBD and 100 Harris Street offered buyers an attractive weighted average lease expiry (WALE) of 7.6 years."

Originally a wool store dating back to the 1890s, the refurbished heritage property comprises 26,879 sqm of A-Grade office space over six levels. The property sits on a 7,791 sqm site with frontages on both Harris Street and Pyrmont Street, and anchor tenants WeWork and Fairfax's Domain are both secured on long term leases.

Mr Aroney said, "Sydney's fringe office market provides the strongest prime effective rental growth and lowest vacancy rates of Australia's 19 office markets.

"As a significant contributor to the Sydney fringe market, Pyrmont has been experiencing continuing strong rental growth, outperforming other office markets around the country.

"Strong demand is persistent for office space in this market, with vacancy being the tightest in the country," said Mr Aroney.

Included in the offering is 130 Harris Street, to the south of the existing building, with new office and retail space and car parking being developed to complement 100 Harris Street.  The development will provide retail space fronting Harris Street and flexible office space spanning from Harris Street through to Pyrmont Street, as well as catering for 142 car spaces for the office and retail tenants. This is currently under construction to be completed in October 2017.