Dexus has struck a partnership with Singaporean investor Mercatus to take over a one-third stake in Sydney’s 1 Bligh Street, a $375 million deal that demonstrates the appetite of offshore investors is returning for flagship assets in the local market.

The transaction around the building that houses the Sydney office of the Prime Minister and meeting spaces for the federal cabinet, along with tenants including Bloomberg Australia, Clayton Utz and Oil Search, was struck at around its most recent book value and at a 4.38 per cent capitalisation rate, akin to an investment yield and a key benchmark for pricing in a market still emerging from the COVID-19 disruption.