Dexus has taken a sharp discount on the sale of a A$293.1m (€173m) 18-storey Sydney office asset to Australian fund manager Quintessential.

Quintessential said the 1 Margaret Street tower was settled at a discount of around 21% to the 30 June 30, 2021 valuation.

But Dexus said the sale was “in line with the 30 June 2023 book value” of the property.

Quintessential has seeded the asset in a newly-launched trust, in which Dexus said it would invest A$50m. Quintessential will manage the asset.

Quintessential said that the acquisition of 1 Margaret Street required approximately A$207m of investor equity, of which the current fund, Quintessential Equity Master Fund No.3, would invest its remaining A$70m of committed funds.

The manager is seeking to raise an additional A$137m to pay for the acquisition.

Quintessential plans to spend about A$70m to fully regenerate the property and enhance its leasing competitiveness.

The building last changed hands 25 years ago. It has a current rental occupancy of 95.1%, with a weighted average lease expiry of 2.1 years.

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