OUE REIT has entered into a share and unit sale agreement with Mitsubishi Estate Co (MEC) to acquire a 19.9% interest in Salesforce Tower in Sydney at an agreed property price of A$357.2 million (around $319.8 million).
After taking into account the debt and other net assets attributable to the 19.9% interest in the property, the purchase consideration is A$195.5 million (around $175.0 million).
Salesforce Tower is expected to generate an initial passing yield of approximately 5.8% and the acquisition has DPU accretion of 0.9% on a pro forma basis.
Located in Circular Quay, Salesforce Tower is a 55-storey premium-grade commercial tower at Sydney's 180 George Street.
The property enjoys a high actual occupancy of 99.2% as of Dec 31 2025. The property delivers resilient income supported by a long WALE of 5.5 years and a tenant base that includes Salesforce, TikTok and Jones Lang LaSalle.
Han Khim Siew, CEO of the manager, says this acquisition marks the commencement of Phase 3 of OUE REIT’s value creation journey.
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"Following the divestment of Lippo Plaza Shanghai in 2024, an ageing asset on a short leasehold operating in a challenging market, we have successfully redeployed capital into Salesforce Tower, a prime freehold, newly built asset in Sydney’s core precinct with compelling upside potential, supported by sustained flight-to-qualit demand and limited office supply.”
“Looking ahead, Australia offers a stable economic outlook, supported by strong capital investment flows and resilient demand drivers. In Sydney, favourable demographic tailwinds and proactive government planning are expected to further drive long-term office demand," he says.
Nonetheless, Han points out that even as the REIT is expanding into Sydney, Singapore remains the core market, accounting for 94.9% of the portfolio value post-acquisition.
"We will also continue to explore opportunities to further enhance our portfolio through disciplined capital allocation, with a goal to deliver sustainable long-term growth for our unitholders,” he adds.
