Dexus on hunt for new partner as Mercatus looks for Bligh St exit
The complex at 1 Bligh St is a premium-grade, 29-storey building in Sydney’s financial core, with good access to transport and other amenities.
Singaporean group Mercatus Co-operative is selling a slice of the landmark 1 Bligh St complex in the heart of the Sydney CBD, with investment bank JPMorgan working with co-owner and manager Dexus to secure a new partner on the complex.
The move by Mercatus comes after it tapped the bank mid-year for a review that led it to switch away from directly owning real assets, including property, and to put funds into pooled real estate trusts.
Dexus will work with the bank on finding a replacement partner on the complex over coming months, with offshore groups likely to chase the asset.
Mercatus bought its one-third stake in the $1.1bn building just last year, but after the review of its real estate holdings is also selling a mall portfolio in Singapore.
Dexus helped get the Singaporean group into Australia, setting up the Mercatus-Dexus Australia Partnership joint venture with the Mercatus in April last year.
The venture acquired its interest in 1 Bligh St from Cbus Property for $375m. Cbus Property co-developed 1 Bligh and is co-owner of 5 Martin Place, also in Sydney’s CBD, with Dexus. The pair continue to have close ties.
Mercatus has an indirect 90 per cent share in the MDAP venture, with Dexus holding the remainder. It was structured to enable additional office acquisitions in the future.
Dexus is the investment manager of the venture and also manages 1 Bligh St. Dexus and its flagship Dexus Wholesale Property Fund each held one-third stakes in the tower before Mercatus bought into it.
Forming the venture bumped up Dexus’s effective ownership interest to 36.66 per cent in the Bligh St tower.
The complex at 1 Bligh St is a premium-grade, 29-storey building in Sydney’s financial core, with good access to transport and other amenities.
The property is 99.5 per cent-occupied. Major tenants include law firm Clayton Utz, media company Bloomberg Australia and the federal government. The parties declined to comment, but the Singapore group remains invested in the Dexus unlisted platform.
The move in Sydney also comes as major Asian groups jostle for the parcel of retail assets in Singapore that Mercatus is selling.
After Mercatus hired JPMorgan, it bundled up four Singapore retail-focused properties for a potential sale. The assets are Jurong Point, AMK Hub, Mercatus’s half-stake in Nex and strata space in Thomson Plaza.
In July, it was reported that heavyweights including Singapore’s CapitaLand Integrated Commercial Trust and Hong Kong’s Link Real Estate Investment Trust were vying for the near-$3bn portfolio.
