OUE REIT has entered into a share and unit sale agreement with Mitsubishi Estate to acquire a 19.9% interest in Salesforce Tower, a freehold 55-storey prime commercial tower in Sydney, Australia, at an agreed property price of A$357.2 million (S$319.8 million).

After taking into account the debt and other net assets attributable to the 19.9% stake in the property, the purchase consideration is A$195.5 million, the Singapore-listed REIT’s manager said in a press release on Feb 24.

The manager described the acquisition as a yield-accretive strategic entry into Sydney’s CBD. The prime, newly built asset has “compelling upside potential, supported by sustained flight-to-quality demand and limited office supply”, said Han Khim Siew, CEO of the manager.

Read also: IREIT Global net property income tumbles 38.7% on Berlin vacancy

The deal marks the third phase of OUE REIT’s value creation journey. After divesting Lippo Plaza Shanghai in 2024, an ageing asset on a short leasehold operating in a challenging market, the manager is redeploying capital into Salesforce Tower. It intends to finance the acquisition cost with a combination of debt and partial net sales proceeds from the sale of Lippo Plaza Shanghai.

Salesforce Tower is expected to generate an initial passing yield of about 5.8%. The acquisition is expected to increase OUE REIT’s distribution per unit by 0.9% on a pro forma basis.

Located at Circular Quay, one of Sydney’s key corporate and cultural precincts, the property at 180 George Street is within walking distance of the Sydney Opera House, the Royal Botanic Garden and the Sydney Harbour Bridge.

Its net lettable area totals 59,977 sq m in office space and 1,937 sq m in retail space.

It has a high actual occupancy rate of 99.2% as at Dec 31, 2025. The property delivers resilient income supported by a long weighted average lease expiry of 5.5 years (by gross rental income) and a tenant base including Salesforce, TikTok and Jones Lang LaSalle (JLL).

While the manager expands its footprint into Sydney, its core market will continue to be Singapore. The city-state accounts for about 94.9% of the REIT’s portfolio value post-acquisition.

For more news and analysis, read our weekly e-paper. Prefer a print copy? Get it delivered to your home or office every Monday.

Read also: UOL's development revenue grows 26% to $1.51 bil; sees stable demand for private homes