The Singapore-listed OUE REIT has confirmed that it is in exclusive talks with Mitsubishi Estate Asia (MEA) to buy a stake in Salesforce Tower, Sydney’s tallest office building.
The trust’s manager, OUE REIT Management, confirmed the situation in a statement to the Singapore stock exchange following a report in The Australian newspaper. The newspaper reported that OUE REIT was the potential buyer of a 20% interest in the office tower from Mitsubishi Estate Asia. The paper also reported that OUE REIT was in negotiations to purchase the asset at a mid-5% to 6%, yield, with the final value expected to be around A$350m (€201m).
Kelvin Chua, company secretary of OUE REIT Management, stated: “In line with its mission to deliver sustainable, long-term value to unitholders, the manager continually evaluates potential and credible acquisition opportunities that are aligned with OUE REIT’s strategy. Singapore remains OUE REIT’s core market, the manager has also been exploring opportunities in key gateway cities, including Sydney, Australia, which offer strong real estate fundamentals and stable long-term growth prospects.
“In this regard, while the manager is in exclusivity with Mitsubishi Estate Asia with respect to the acquisition of a partial stake in Salesforce Tower, Sydney, negotiations between the parties are currently still ongoing and parties have yet to enter into any binding agreement for the acquisition.
“Accordingly, and at this juncture, there is no certainty that any transaction will materialise. Should there be any material developments which warrant disclosure, the manager will make the appropriate announcements on SGXNET.”
MEA and Chinese insurer, Ping An, backed Lendlease in the development of the 56-storey skyscraper, completed in 2023. The skyscraper is the centrepiece of the Sydney Place precinct, a major urban regeneration project in Circular Quay.
Ping An is the majority owner with a 50% stake and is reported to be trying to offload its stake. A Lendlease office trust holds the remaining 20% of Salesforce Tower.
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