Jonathan Chancellor | 20 March 2012

Another tenant for Sydney’s 1 Bligh Street, but Dexus needed to grease the wheels

Sydney’s 1 Bligh Street has secured tenant Oil Search, which is leasing two levels at Dexus’ flagship sustainable office tower. But the deal required higher leasing incentives than previous deals.

At its half-year results, Dexus said its incentives across its portfolio had fallen from 20% two years ago to 16 % but were unlikely to fall further.

Dexus’ new managing director, Darren Steinberg, said the Sydney market, which has been adversely affected by white-collar job losses and economic uncertainty, was expected to improve next year.

Oil Search, which is Papua New Guinea’s biggest oil and gas producer, will occupy levels 22 and 23.

The 3,274-square-metre lease runs for 12 years.

One Bligh, completed last year, is owned by Dexus Property Group, Dexus Wholesale Property Fund and Cbus Property.

Law firm Clayton Utz is the tower’s anchor tenant and the Commonwealth government's Ministerial and Parliamentary Services recently leased three floors.

Dexus says a further two floors are under offer, leaving three vacant high-rise floors and a number of smaller part-floor tenancies.

Financial media group Bloomberg has been linked to the pending two-floor lease.

The Australian Financial Review says the new deals are understood to have been struck at higher incentives than previous deals.

The two new leases would take the tower’s occupancy level to 82%.

Cadigal Office Leasing and Jones Lang LaSalle represented the One Bligh Street owners, and LPC was the tenant adviser to Oil Search.