GPT Group (ASX: GPT) has announced the sale of its 50% stake in the MLC Centre in Sydney NSW to its co-owner, Dexus, for $800M.
Currently the ASX listed Dexus (ASX: DXS) owns 25% and the unlisted Dexus Wholesale Property Fund (DWPF) owns 25%, with both looking to increase their ownership to 50% following the acquisition of GPT’s stake. The sale was proposed by GPT in January 2019 with Dexus exercising its pre-emptive rights to acquire the interest as the existing co-owner. Settlement is expected in early April 2019.
The MLC centre is an iconic Sydney office and retail centre. The building was opened in 1977 and consists of 67-levels of A-grade office space across 66,900 sqm as well 10,600 sqm of retail space and 308 car spaces.
For GPT, the sale realises an annualised return of over 20% p.a. for the last three years and is a 3% premium to the book value at 31 December 2018. Proceeds from the sale are expected to be reinvested into other development projects.
For Dexus, the acquisition of GPT’s stake provides DXS with sole control over the property and marks their confidence for future growth in the Sydney office market. The ASX listed Dexus will be funding its share of the acquisition through a $425M convertible note issue.