OUE Reit to acquire a 19.9% interest in Salesforce Tower in Sydney for S$175 million

[SINGAPORE] The manager of OUE Reit has entered into a share and unit sale agreement for a 19.9 per cent stake in Salesforce Tower in Sydney, Australia, for S$175 million.

In a bourse filing on Tuesday (Feb 24), the manager said that the 19.9 per cent interest will be acquired at an agreed property price of about S$319.8 million.

Salesforce Tower is expected to be yield accretive, generating an initial passing yield of about 5.8 per cent.

The acquisition is expected to enhance OUE Reit’s income with a distribution per unit accretion of 0.9 per cent on a pro forma basis.

Salesforce tower is a 55-storey commercial building located in Circular Quay, Sydney. The property’s tenants include Salesforce, TikTok and JLL, with the actual occupancy rate at 99.2 per cent as at Dec 31, 2025.

The estimated total acquisition cost stands at S$180.1 million, comprising the purchase cost of S$175 million, a S$3.2 million acquisition fee to the manager, and professional fees and expenses of S$1.8 million.

The purchase will be financed with a combination of debt and partial net proceeds from the divestment of Lippo Plaza Shanghai.

OUE Reit cited a few reasons for the acquisition. One was the opportunity to acquire a premium freehold property at Sydney’s core central business district (CBD).

Another was the potential upside for the premium commercial segment in Sydney’s core CBD, given constraints in premium office supply.

“In Sydney, favourable demographic tailwinds and proactive government planning are expected to further drive long-term office demand,” said Han Khim Siew, CEO of the trust’s manager.

The Reit noted that the property has stable cash flows supported by a long weighted average lease expiry of 6 years by net lettable area, and well-spread lease expiries.

It added that the acquisition will also enhance portfolio diversification and reduce concentration risk. The Reit’s portfolio value is expected increase from S$5.8 billion to S$6.1 billion, with 94.9 per cent exposure in Singapore and 5.1 per cent exposure in Australia.

“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,” said Han.

Units of OUE closed flat at S$0.37 on Tuesday.