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Dexus Sells U.S. Warehouses for $561 Million on Exit

Updated on

Dexus Property Group has agreed to sell 26 of its U.S. industrial properties for $561 million as it winds down its business in the country by April.

Dexus sold 25 assets to a group advised by Heitman LLC for $543 million, a 13 percent premium to book value, the Sydney-based company said in a statement to the Australian stock exchange, without identifying the buyer. Dexus also sold an asset in Ontario, California, to another buyer at a price that’s 17 percent higher than its book value, it said.

The sale is one of the last steps in Dexus’s exit from the U.S. as it cements its position as Australia’s biggest office landlord. It’s shifting its focus back home after the National Pension Service agreed in August to co-invest A$360 million ($377 million) in 13 of its Australian industrial properties.

“Our clear intention is to reinvest the proceeds from this sale back into our core Australian central business district office markets,” Darren Steinberg, chief executive officer of Dexus, said in the filing. “We have exposure to a number of potential acquisitions but we are also comfortable with a position of reduced gearing and quality earnings from our existing Australian portfolio.”

Dexus was in talks to sell the assets to South Korea’s National Pension Service, a person briefed on the transaction said last week. David Yates, a Sydney-based Dexus spokesman, declined to comment on the deal.

The company has one remaining U.S. property with 28 tenants in Los Angeles valued at $58 million, it said. The closing of its U.S. office by April is expected to result in annual savings of about A$5 million, it said.

Dexus shares rose 4.5 percent to A$1.055 at the close of trading in Sydney, the highest since October 2008, bringing this year’s gains to 27 percent.

Dexus will use the proceeds after A$61 million of costs to pay down debt, reducing the ratio of debt to total assets to 24 percent from 29 percent, it said. The sale will help boost net tangible assets by 0.8 Australian cents a share, it said.

The company sold 65 industrial properties for $770 million to Blackstone Group LP in June.

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