Singapore-listed OUE REIT has acquired a 19.9% interest in Salesforce Tower, a 55-storey Foster & Partners-designed office building on Sydney’s waterfront for A$357.2m (€215m) from Mitsubishi Estate.
Han Khim Siew, chief executive of OUE REIT, said in a statement that the landmark acquisition marked the commencement of the third phase of the fund’s “value creation journey”.
“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-quality demand and limited office supply.”
Han said that Australia offered a stable economic outlook, which was 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 added.
The freehold prime commercial tower is expected to generate an initial passing yield of approximately 5.8%, the company said. IPE first flagged the potential move in January.
OUE REIT said it would finance the acquisition via a combination of debt and partial net sales proceeds from the divestment of Lippo Plaza Shanghai.
CBRE’s head of capital markets, Pacific, Flint Davidson, who oversaw the marketing of the property with his colleagues on behalf of Mitsubishi Real Estate, said: “This transaction reinforces the appeal of Sydney’s core CBD office market, which continues to attract new local and global capital.The asset attracted strong investor interest.”
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