Dexus offloads 480 Queen Street, Brisbane for $700 million
Dexus (ASX: DXS) has exchanged contracts to sell the Premium grade office tower at 480 Queen Street, Brisbane for a gross sale price of $700 million (at 100% ownership). Dexus and Dexus Wholesale Property Fund (DWPF) each hold a 50% ownership interest in the asset.
The net sale price of $657.3 million is in line with independent valuation as at 30 June 2026, representing a circa 4% discount to book value at 31 December 2025.
The disposal marks a clear execution of the group’s capital recycling strategy, releasing capital that management has stated will assist in funding higher returning initiatives.
The sale is subject to Foreign Investment Review Board (FIRB) approval and is otherwise unconditional.
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Deal terms and settlement structure
The transaction proceeds for Dexus’s 50% share are structured in stages, with the bulk received on settlement and a smaller deferred component carrying an income coupon. Settlement is expected to occur on 1 December 2026.
Of Dexus’s 50% share, the key mechanics are as follows:
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Circa $259 million of the net sale price received on settlement (1 December 2026)
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$70 million deferred to 1 June 2028 at a 6.0% per annum coupon payable to Dexus
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Deal subject to FIRB approval, otherwise unconditional
The deferred structure provides Dexus with a running yield on the outstanding balance until the final payment date in mid-2028.
| Metric | Detail |
|---|---|
| Gross sale price | $700m (100%) |
| Net sale price | $657.3m (100%) |
| Discount to book value | circa 4% (vs 31 Dec 2025) |
| Occupancy by income | 89.7% (as at 30 June 2026) |
| WALE | 3.8 years |
The building carries a weighted average lease expiry (WALE) of 3.8 years, a measure of the average remaining term across its tenant leases, with occupancy by income of 89.7% as at 30 June 2026.
Why capital recycling matters for REIT investors
Capital recycling is a common strategy among real estate investment trusts (REITs). In simple terms, it involves selling mature or non-core assets and redeploying the proceeds into higher-returning initiatives while managing the balance sheet. The disposal of the Premium grade tower at 480 Queen Street fits squarely within this approach.
One measure investors watch closely is “look-through gearing”, a gauge of a REIT’s overall debt load that accounts for its share of debt held within equity-accounted investments. According to Dexus, the sale proceeds would reduce its pro forma look-through gearing by circa 1 percentage point.
A lower gearing level strengthens the balance sheet and frees capital for redeployment, which is central to the strategic logic behind the transaction.
The 480 Queen Street sale forms part of the broader Dexus $2 billion divestment program, which the group completed ahead of its FY27 target by exchanging contracts on three office properties for a combined $715 million, with management noting the pricing represented a significant premium to the value implied by the current security price.
Ross Du Vernet, CEO and Managing Director, Dexus
“This transaction is a further demonstration that we are executing on our strategy and will release capital to assist in funding higher returning initiatives. We retain a significant office exposure in Brisbane, focused on the irreplaceable Waterfront precinct with embedded growth options.”
Retained Brisbane exposure through the Waterfront precinct
The disposal does not signal an exit from the Brisbane office market. Dexus and DWPF retain exposure through their jointly owned complex at Waterfront, which comprises multiple towers and a retail offering over a circa 1 hectare site in a central riverfront location.
Management has pointed to “embedded growth options” within the precinct, framing it as forward-looking optionality tied to the ongoing development pipeline.
Current metrics across the Waterfront complex include:
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One Eagle Street: 93.8% occupied (by income, as at 30 June 2026)
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Waterfront North Tower: 71% pre-leased (includes Heads of Agreement)
For investors, the transaction effectively swaps a mature asset for capital while retaining exposure to a premium riverfront precinct with development upside.
What this means for Dexus and next steps
The strategic rationale is twofold. Proceeds are intended to assist in funding higher returning initiatives, while the sale would modestly de-gear the balance sheet by reducing pro forma look-through gearing by circa 1 percentage point.
One example of the higher-returning initiatives Dexus has flagged as a destination for recycled capital is the Ravenhall logistics precinct, a joint venture with Boral targeting 630 hectares of development in Melbourne’s western corridor with potential for 2.5 million square metres of lettable area.
The transaction sits within the broader Dexus Platform, which manages a high-quality Australasian real asset portfolio valued at $51.5 billion. This includes a $15.3 billion listed portfolio, a $36.2 billion funds management business, and an $11.5 billion real estate development pipeline that provides scope to grow both the listed and funds’ portfolios.
Investors will be watching several timeline markers as the deal progresses:
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FIRB approval (condition precedent to completion)
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Settlement expected on 1 December 2026
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Deferred payment of $70 million due 1 June 2028 at a 6.0% per annum coupon
The sale of 480 Queen Street represents a further step in Dexus’s stated capital recycling strategy, releasing capital while retaining a significant office exposure in Brisbane through the Waterfront precinct.
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