OUE REIT Buys Ping An’s Half-Interest in Sydney’s Salesforce Tower for A$864M
Singapore’s OUE REIT has agreed to purchase a 50 per cent stake in Sydney’s Salesforce Tower from Ping An Real Estate for A$864 million (S$604.5 million), increasing its ownership to 69.9 per cent. The deal gives the REIT majority control of the city’s tallest office building, funded by new borrowin
Singapore’s OUE REIT has agreed to buy a half interest in Sydney’s Salesforce Tower at a value of A$864 million (S$604.5 million), according to a statement by the trust’s manager late on Friday, giving it majority ownership of the city’s tallest office building about eight months after buying out Mitsubishi Estate’s stake. The purchase from Ping An Real Estate, the property arm of China’s Ping An Insurance, will lift OUE REIT’s interest in the tower to 69.9 per cent from 19.9 per cent, with cash consideration of A$461.4 million plus assumption of debt. At A$1.73 billion for the whole building, the price is 3.7 per cent below the valuation implied by the stake OUE REIT bought in February from Mitsubishi Estate.
OUE REIT is funding the purchase of the 55-storey building at 180 George Street with new borrowings and part of the proceeds from its sale of the Crowne Plaza Changi Airport, with Australia to represent 17.6 per cent of the trust’s portfolio by value following the transaction from 5.7 per cent previously. “By redeploying the net cash proceeds from the divestment of Crowne Plaza Changi Airport into high-quality, future-ready properties such as 180 George Street, we continue to enhance portfolio quality while capturing opportunities across market cycles and geographies,” said Han Khim Siew, chief executive of OUE REIT’s manager.
Ping An had notified its co-owners on 8 July that it intended to sell its interest in the property, and OUE REIT accepted its 40 per cent share of the stake on 12 October before taking up the remaining 60 per cent, offered as shortfall interests, on 22 October, according to the announcement. The rights came with the trust’s February purchase, and completion of the deal remains subject to approval from Australia’s Foreign Investment Review Board. The sale gives Ping An an exit it has pursued since at least 2023, when it appointed brokers to market its half-share.
Knight Frank valued the 50 per cent interest at A$864 million as of 30 September, the same as the price, while the A$357.2 million OUE REIT agreed in February for the Mitsubishi Estate stake implied A$1.795 billion for the whole building. Combined, the two purchases represent A$1.22 billion of property value. OUE REIT is covering the cost with new borrowings and part of the S$500 million from selling Crowne Plaza Changi Airport, whose buyer, a venture between OUE REIT’s sponsor and Tokyo Century, exercised its purchase option on Wednesday. The sale is due to complete on 30 October with Luke Billiau, JLL’s Sydney-based head of capital markets, and Adam Woodward, head of office capital markets at Colliers in Sydney having advised on the transaction, according to market sources.
Aggregate leverage would rise to 45.3 per cent from 41.5 per cent at the end of June once the hotel sale completes, according to pro forma figures in the announcement, and to 48.5 per cent without the proceeds, close to the 50 per cent ceiling for Singapore REITs. The manager said it may issue up to S$150 million of perpetual securities to bring leverage down to 42.8 per cent, a step it will also consider if the sale of One Raffles Place, its office tower in Singapore’s financial district, does not go ahead. OUE REIT said on 8 October that it had entered exclusive talks with potential investors on that sale.
With the 263-metre tower’s 61,915 square metres (666,437 square feet) of net lettable area fully let, the latest deal values the property at about A$27,909 per square metre, according to Mingtiandi calculations, against the A$28,991 OUE REIT paid in February. Of that space, 59,977 square metres is offices and the remainder retail. Designed by Foster and Partners with Architectus and completed in November 2022, the tower stands on Circular Quay, within a two-minute walk of the ferry terminal serving Sydney Harbour and five minutes of two light rail stations and the Circular Quay and Wynyard railway stations, according to the announcement. The 50 per cent interest also covers Jacksons on George, a detached four-storey building of bars and a restaurant.
Occupancy reached 100 per cent at the end of September from 99.2 per cent at the end of 2025, with tenants including Salesforce, TikTok, JLL, Bain & Company and Accenture. The weighted average lease expiry fell to 4.8 years by gross rental income from 5.5 years at the end of 2025, with leases covering 15.4 per cent of net lettable area expiring in 2028, the largest block before 2030, and 78.9 per cent running beyond that year. Technology, media and telecoms tenants account for 71 per cent of the tower’s gross rental income, and Salesforce will become OUE REIT’s largest tenant at 14.0 per cent of its commercial income, up from 5.1 per cent, according to the presentation.
