Australian real estate investment trust Dexus has partnered with Mercatus Co-Operative to buy a stake in the 1 Bligh Street office tower in Sydney for A$375m (€244m).

Under the Mercatus Dexus Australia Partnership (MDAP), Singapore-based property investor Mercatus will hold an indirect 90% share in the vehicle, with Dexus holding the remaining 10%.

MDAP acquired the stake in the 29-storey building from Cbus Property, the real estate arm of the building industry super fund Cbus Super.

Dexus and its unlisted, Dexus Wholesale Property Fund, jointly owned the building with Cbus Property, with a one-third interest each since its completion in 2011. The latest transaction will lift the Dexus group’s interest in the building to 36.66%

The deal marked Mercatus’ first acquisition outside Singapore and its first foray into Australia in partnership, said Tan Ser Joo, Mercatus’ chief executive officer.

She said: “This acquisition is part of our strategy to diversify our portfolio and to generate sustainable long-term returns.”

Dexus CEO, Darren Steinberg said: “This transaction demonstrates the ongoing strength of demand from international institutions for high-quality Australian office asset exposure under Dexus’ platform management.”

The establishment of the partnership was consistent with Dexus’s strategic initiative of expanding and diversifying the fund‘s management business while progressing the objective of being the wholesale partner of choice, he said.

Dexus said MDAP had been structured to enable additional office acquisitions in the future.

The Australian company will be the investment manager of the joint venture post-acquisition and will continue to manage 1 Bligh Street.

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