Dexus, CPPIB in advanced talks to sell Sydney’s $550m Tiffany building
The owners of Sydney’s 175 Pitt Street, the 22-storey office building best recognised for housing jeweller Tiffany & Co’s flagship store, are closing in on a sale of the tower, which has a $550 million book value.
Street Talk understands that Dexus and the $C600 billion-plus ($663.5 billion) Canada Pension Plan Investment Board are in advanced discussions to sell 175 Pitt Street to Marquette Properties, a firm founded by former Multiplex executive Toby Lewis.
Sources said Marquette had finished due diligence on the tower and was now in talks with lenders to bankroll the acquisition before it formally submitted a binding bid. A Dexus representative declined to comment when contacted by Street Talk.
About a fifth of the tower is taken up by Tiffany, and another 20 per cent or so is with co-working space provider JustCo. Quadrant’s Fitness First has run a gym in the basement for a decade. The tower’s book value was about $622 million as of December 31, but this was slashed to about $550 million during Dexus’ revaluation of its portfolio in June.
The Dexus-CPPIB joint venture, dubbed Dexus Office Trust Australia, dates back to 2014 when the two investors teamed up to take the then ASX-listed Commonwealth Property Office Fund private. Should Marquette succeed in lining up the financing to buy the tower, it would be the Dexus-CPPIB joint venture’s second exit this year.
In June, the duo sold 50 per cent of Sydney’s 5 Martin Place for $310 million – a 24 per cent discount from the peak valuation – to industry super fund Cbus, which moved to 100 per cent ownership. They are testing the market for several other assets, including 385 Bourke Street in Melbourne, at a time when office towers have recovered from their COVID-19 lows following a wind-down of work-from-home mandates – but are still held at book values that offer enough of a discount to encourage buyers.
The Tiffany building’s would-be-owner Marquette has focused its efforts on the south-east Queensland market. Two years ago, it paid a premium to book value to buy Dexus-CPPIB’s 10 Eagle Street in Brisbane – colloquially known as the Gold Tower – for $285 million.
It dipped its toes in the Sydney office market last year, with a small investment in two of the Barangaroo towers.
