Weekly Real Estate News
Summary: OUE REIT proposes to lift its stake in Sydney’s Salesforce Tower from 19.9% to 69.9%, with an A$864 million agreed property value and A$461.4 million estimated purchase consideration.
A Singapore-listed real estate trust is moving toward majority ownership of one of Sydney’s signature office towers, a transaction that illustrates how investors are still willing to commit substantial capital to select downtown buildings even as office markets elsewhere struggle.
OUE REIT disclosed on October 23 that it accepted an offer to acquire an additional approximately 50% interest in 180 George Street, also known as Salesforce Tower. If completed, the transaction would raise its ownership from 19.9% to about 69.9%. The company describes an A$864 million agreed property price for the interest being acquired, but that is not the amount it expects to pay in cash: after attributable debt and other net assets, estimated purchase consideration is A$461.4 million.
The distinction matters for investors comparing office transactions. OUE’s official October 23 press release puts the estimated total acquisition cost, including related items, at A$539.3 million. Financing is expected to come from a combination of debt and proceeds from the planned divestment of Crowne Plaza Changi Airport.
From minority investor to majority owner
The REIT acquired its original 19.9% interest in March 2026. That investment provided pre-emption rights, which it is now using to pursue the additional stake. Management said the agreed property valuation on a comparable 100% basis is 3.7% below the valuation used for the earlier acquisition. That comparison points to a negotiated change in pricing rather than an uncomplicated rise in the tower’s value.
Located at Circular Quay, the 55-story, 263-meter building was completed in November 2022. Its tenants include Salesforce, TikTok and Jones Lang LaSalle. OUE reported the building was fully occupied on September 30, with a weighted average lease expiry of 5.2 years by net lettable area. These are property-level operating figures, not a guarantee that future rental income or valuations will remain unchanged.
OUE estimates the proposed acquisition would increase distribution per unit by 3.2% on a pro forma basis for the six months ended June 30. The company also expects aggregate leverage to rise temporarily to 45.3% following the deal and the planned airport-hotel sale. It has discussed potentially issuing up to S$150 million in perpetual securities, which could reduce that leverage to approximately 42.8% if completed.
Office investment remains selective
The planned transaction comes amid a widening divide in commercial office performance. Buildings with strong tenants, modern systems and central locations can still attract large buyers, while older properties facing capital expenditure, tenant departures or refinancing needs confront a much tougher market. OUE is positioning the Sydney building as a long-duration income asset, but its proposed financing would also increase balance-sheet exposure.
Upon completion, OUE expects Australia to represent 17.6% of the value of its portfolio excluding the planned hotel divestment, up from 5.7% before the acquisition. The remaining 82.4% would be in Singapore. Those percentages are management’s pro forma estimates, not an accomplished portfolio shift.
The underlying Singapore Exchange announcement was broadcast October 23 at 5:16 p.m. Singapore time. Subsequent weekend and Monday coverage does not make this an October 26 transaction. The acquisition is proposed and has not been represented by the company as closed.
Featured image: Illustrative Sydney skyline photograph by Pepsi / Unsplash; not an identified image of Salesforce Tower.
