OUE buys Salesforce Tower stake
In its maiden Australian acquisition, OUE Real Estate Investment Trust is buying a 19.9 per cent stake in Sydney’s Salesforce Tower from Mitsubishi Estate Co.
The deal values the interest at $357.2 million.
After accounting for debt, it will pay $195.5m (S$175m) in cash for the interest.
The yield is 5.8pc.
“This transaction reinforces the appeal of Sydney’s core CBD office market, which continues to attract new local and global capital,” CBRE’s Flint Davidson, who brokered the off-market deal with Stuart McCann and James Parry, said.
“As Sydney’s newest premium grade tower, [it] offers high-quality diversified income, compelling rental growth prospects, and a premier position in the city’s financial core – attributes which contributed to strong investor interest in the Mitsubishi Estate Asia divestment,” he added.
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Salesforce Tower, opened in 2022 at 180 George Street, near Circular Quay, contains c56,000 square metres over 55 storeys (continues below).
It is 99.2pc occupied with a weighted average lease expiry of 5.5 years; tenants include Salesforce, TikTok and Jones Lang LaSalle.
China’s Ping An Real Estate owns 50pc with a Lendlease fund holding a fifth.
The balance 10pc is controlled by investors including the Odakyu Electric Railway and ME Global Partners.
In a statement, OUE REIT said the asset is expected to deliver an initial yield of about 5.8pc and increase its distribution per unit by around 0.9pc on a pro forma basis.
Chief executive officer Han Khim Siew said the acquisition marks the start of the trust’s next phase of growth, following the sale of an older Shanghai asset in 2024.
After the deal, Singapore real estate will still account for about 94.9pc of the OUE REIT’s portfolio value.
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