Dexus cements Atlassian tower deal
Australia’s largest office tower landlord, Dexus, has committed to a stake of about two-thirds in the $1.8 billion Atlassian building in central Sydney, taking a major vote of confidence in the long-term value of office real estate.
Construction on the tower, to rise within Sydney’s emerging Tech Central” precinct, is expected to get under way this year. The 40-level tower that will form Atlassian’s new headquarters is also set to become a big landmark in its own right, distinguished by its hybrid concrete and timber design.
Just as distinctive is Atlassian’s “Team Anywhere” policy, giving staff autonomy to work where they want and to set their own schedules. They need never work in an office again, including the Atlassian tower, if they so choose.
The tower, on Lee Street near Central Station, will comprise 75,000 sq m of space, with a new YHA at its base. Atlassian will occupy the office component on a 15-year lease.
After striking an initial deal to back the project last year, Dexus has finalised the terms of its agreement with the tech giant to fund, develop and invest in the Atlassian tower.
The total project costs are expected to come in about $1.4 billion. Dexus will fund this during the construction, using debt. The ASX-listed office landlord will retain an equity interest of between 60 per cent and 65 per cent in the asset when it is built, after the refinancing and a partial return of capital. Construction firm Built is expected to build the tower.
As it expands its own fund management platform, Dexus may also bring third-party capital into the project even before it is finished. Atlassianwill retain a stake of about 35 per cent to 40 per cent in the tower.
“This unique project will catalyse Sydney’s innovation and technology precinct, Tech Central, and set a new global benchmark in sustainability and smart workplace that challenges the status quo,” said Dexus chief investment officer Ross Du Vernet in a statement.
The financial close on the agreement is expected by the middle of this year. Construction could start shortly after that, and the tower could be completed in 2026.
Dexus is pursuing an even more ambitious office development in the neighbourhood, the $2.5 billion Central Place Sydney, in a joint venture with Frasers Property Australia.
