The property is a fit-for-purpose, 25,000 square metre A-grade office tower that has been pre-committed on a 12-year lease with Property NSW. As part of the sale agreement, Dexus is responsible for delivering the development and will be the property manager for five years after its completion in mid-2018.

The Bates Smart-designed tower will be the new home of the NSW Department of Education when it moves out of the Lands and Education Buildings, collectively known as The Sandstones in Bridge Street, Sydney. Built Pty Ltd will construct the new asset with a 5-star NABERS Energy and 4-star NABERS Water rating as well as a 5-star Green Star rating.

Alongside the new asset, Charter Hall is also a large developer with its $220.5 million 1PSQ, which is the first project to begin construction as part of Parramatta City Council's Parramatta Square vision.

The facility will be the new CBD campus of Western Sydney University and includes 14 levels of A-grade commercial space over 26,500 sq m.

Adrian Taylor, the group executive - office at Charter Hall, said the opportunity to acquire this asset "is consistent with our strategy of acquiring assets with a long weighted average lease expiry (WALE), leased to strong tenant covenants underpinning high-quality cash flow in strategic locations".

"The market is extremely competitive for high-quality long WALE investment assets, particularly leased to blue chip tenants," Mr Taylor said.

"We see this investment, which extends our relationship with the NSW government as a tenant customer, as an exciting opportunity to create another landmark office tower in Parramatta CBD, which will benefit from significant infrastructure upgrades and which is proving to be increasingly attractive to tenant customers."

The sale is the remaining 2017 trading property asset from Dexus and alongside Parramatta, other trading projects that have been sold and contribute to the financial 2017 trading profits include 57-65 Templar Road, Erskine Park, which settled on July 1, last year and 79-99 St Hilliers Road, Auburn, which settled on January 31 this year.

In Melbourne, Dexus has received a planning permit for a residential scheme at 32 Flinders Street, which is currently a car park.

According to a new report by PricewaterhouseCoopers (PwC), Parramatta's economic growth is set to almost double over the next five years and the city is on track to become a leading financial hub.

The Parramatta 2021 report, commissioned by the City of Parramatta, found the economy of Sydney's dual CBD will grow by $7 billion by 2021, to $30 billion.

Knight Frank leasing director Tom Bartlett said with an overall vacancy rate at Parramatta of only 4.3 per cent and no direct vacancy at all in prime-grade stock, average gross prime rents have increased 5.6 per cent during the past 12 months to average $580 per sq m or $469 per sq m net. Incentives have continued to fall across the board, down to 18.4 per cent from 21.5 per cent a year ago.