Dexus looks for buyers for Codan head office in Adelaide

Dexus is looking to sell a $40m office block in Adelaide, which it picked up as part of its acquisition of AMP’s real estate and infrastructure funds business.

Dexus is looking for buyers to take over Codan’s head office at Mawson Lakes.

Dexus is looking to offload a campus-style office complex in Adelaide, which it picked up as part of last year’s acquisition of AMP’s real estate and infrastructure funds business.

The property, located within the Technology Park defence and technology precinct at Mawson Lakes, is leased to ASX-listed electronics and communications manufacturer Codan, which relocated to the site in 2015 after signing a 15-year lease.

Ian Thomas and Alistair Laycock from CBRE are seeking interest via an off market campaign that closed on Thursday. They declined to comment.

It is understood Dexus is seeking offers in excess of the property’s $40m book value reported in March.

The property is the sole South Australian holding in the property and funds group’s Dexus Australian Property Fund.

Occupying a 3.4ha site, the two-storey building offers 7412sq m of office, research & development and production space plus a 1231sq m warehouse built in 2015.

Technology Park, located around 15km north of Adelaide’s CBD, is a South Australian government-led precinct currently home to more than 100 companies, including global defence and technology firms BAE Systems, Raytheon, Lockheed Martin, SAAB Australia and Kongsberg Defence.

An information memorandum sent to investors says the Codan facility was fully refurbished in 2015, followed by additional upgrades in recent years.

“Leased long-term to ASX-listed Codan Limited and surrounded by global defence companies, this asset provides fully refurbished and high spec commercial space and modern high clearance warehousing,” the document says.

“With a ground level building footprint of circa 5000sq m on a significant landholding of approximately 3.445ha, the site offers future expansion potential within the almost fully developed Technology Park.”

Dexus last month said its overall valuations for the year were down 9 per cent, with offices down 11.3 per cent.

Its $2bn Australian Property Fund recently sold off two industrial sites in Melbourne and one in Brisbane for a combined value of more than $206m.

The Mawson Lakes sale follows a string of campus-style transactions in Adelaide, in what has otherwise been a lacklustre year of sales in the city’s office market.

Local fund manager Leyton Funds picked up a five-level building in Keswick from Centuria for $38.25m.

That followed GDA Diversified Property Trust’s $28.2m purchase of Lockheed Martin’s offices at Mawson Lakes and the Department of Defence’s $46m purchase of an office complex near the Osborne shipyard precinct.

BAE is currently building a new fleet of Hunter-class frigates at the shipyards, where future nuclear submarines are also expected to be constructed under the AUKUS defence pact between Australia, the UK and US, adding to a burgeoning pipeline of defence shipbuilding projects in South Australia.

Originally published as Dexus looks for buyers for Codan head office in Adelaide