Dexus will take four years to lease 1 Bligh Street: Merrill Lynch analyst

Property developer Dexus will take at least four years to fully lease its recently completed 1 Bligh Street tower in the Sydney CBD, according to Bank of America Merrill Lynch analyst Simon Garing.

The 27-storey tower features floor plates measuring 1,600 square metres.

Its major tenant is law firm Clayton Utz. The Commonwealth government is believed to be considering taking up to 4,000 square metres of space in the building.

In an October ASX filing, Dexus said 51% of the office tower was still available for rent.

In a note, Garing says the listed trust faces an increasingly volatile environment with key tenants in the highly leveraged financial services sector remaining cautious.

The investment bank has an “underperform” rating on Dexus, while Goldman Sachs and CLSA more optimistically describe the trust as a “safe haven”, the Australian Financial Review reports.

Rents in excess of $1,100 per square metre are being sought for the upper floors of the oval-shaped tower, which is significantly higher than nearby office towers.

The office tower is advertising rents around $650 per square metre.

The 1 Bligh Street tower was recently valued at $629 million tower and is the first high-rise office building to win a six-star rating from the Australian Green Building Council.

It was completed in July this year and officially opened in August 2011 by Prime Minister Julia Gillard.