Listed property giants Charter Hall and Dexus have quietly put billions of dollars worth of CBD office towers up for sale, in one of the biggest tests for a market that all but shut down as flexible work took hold and interest rates soared, sending valuations lower.
The slew of assets now being offered off-market comes as their owners gain confidence that the office sector disruption is finally bottoming out. “I think there’s going to be more office transaction volume announced over the next few months, which is just showing that liquidity is increasing in the office market,” he said.“In every cycle I’ve been through, most of the time there’s a gap between what sellers want and what buyers want. And ultimately, that gap closes as liquidity increases, and that’s what we’re seeing now.”
“We don’t have anything formally for sale. It’s public knowledge that we ran an off-market campaign for 333 George Street. Part of our rationale was that we’re building a second Chifley tower so we’re increasing the scale of our core Sydney CBD exposure quite significantly,” he said. The book value of 333 George Street was about $200 million in December last year. Sources familiar with Charter Hall said the combined value of the office assets offered off-market would run into billions of dollars.
Higher-grade offices outside the CBD include 100 Mount Street in North Sydney . Lower-grade assets that were also informally available included 100 Harris Street in Sydney’s CBD fringe and 101 George Street in western Sydney.