OUE REIT Makes Yield-Accretive Australian Debut with A$357M Salesforce Tower Stake

SINGAPORE – February 24, 2026 – OUE Real Estate Investment Trust (OUE REIT) has made a significant strategic entry into the Australian market, acquiring a 19.9% interest in Sydney's iconic Salesforce Tower for an agreed property price of A$357.2 million. The deal with Mitsubishi Estate Co., Ltd. marks a pivotal moment for the Singapore-based trust, diversifying its geographical footprint and redeploying capital into one of the Asia-Pacific's most resilient and sought-after office markets.

The acquisition, which involves a purchase consideration of A$195.5 million after accounting for debt and other assets, is projected to be immediately beneficial for unitholders, delivering a Distribution Per Unit (DPU) accretion of 0.9% on a pro forma basis. This move signals a new phase of growth for OUE REIT, leveraging the robust fundamentals of Sydney's commercial property sector while upgrading its portfolio with a prime, freehold, and highly sustainable asset.

A Strategic Pivot to a Booming Market

OUE REIT's investment is a calculated bet on the enduring strength of Sydney's Central Business District (CBD), a market defined by a pronounced 'flight-to-quality' trend. As companies nationwide rethink their workplace strategies, demand has converged on premium, well-located, and amenity-rich buildings. This trend has created a two-tiered market where top-tier assets like Salesforce Tower command strong rental growth and high occupancy, while older, secondary stock faces mounting vacancy pressures.

Market data validates this strategy. Prime net face rents in the Sydney CBD Core precinct grew by a robust 6.5% over the past year, with premium-grade assets significantly outperforming the broader market. This rental growth is underpinned by a looming supply crunch. Analysts project that after a wave of completions in 2024, the pipeline for new office stock in Sydney's CBD will be severely constrained, with some forecasts predicting no new completions at all in 2026. Escalating construction costs and challenging economic conditions for new developments are expected to keep new supply well below the long-term average for the next several years.

This supply-demand imbalance creates a favorable environment for owners of existing prime assets. With limited new options available, tenants seeking to upgrade their premises are increasingly competing for a small pool of high-quality buildings. OUE REIT's acquisition positions it to directly capitalize on this dynamic, securing a foothold in a landmark tower with a nearly full occupancy of 99.2% and a long Weighted Average Lease Expiry (WALE) of 5.5 years, ensuring a stable and resilient income stream.

The 'Green Premium': ESG as a Key Investment Driver

Beyond its prime location and modern specifications, Salesforce Tower's most compelling feature is its world-class sustainability credentials. The 55-storey tower boasts a Platinum WELL Certification, a Platinum SmartScore rating, and a 6 Star Green Star rating from the Green Building Council of Australia—the highest possible accolade, signifying 'World Leadership' in sustainable design and operation.

These are not merely accolades; they are powerful commercial drivers in today's market. Environmental, Social, and Governance (ESG) criteria have become a critical factor in corporate real estate decisions. High-calibre tenants, including the tower's anchor occupants Salesforce, TikTok, and Jones Lang LaSalle, are increasingly mandated by their own corporate policies and stakeholder expectations to occupy spaces that align with ambitious sustainability goals. Buildings with top-tier green ratings are proven to attract and retain such tenants, command rental premiums, and exhibit lower vacancy rates.

The Platinum WELL certification, which focuses on human health and well-being, is particularly relevant in the post-pandemic era. It assures tenants that the building provides a healthy and productive environment, a key element in attracting and retaining top talent. By investing in an asset with leading ESG credentials, OUE REIT is not only future-proofing its portfolio against regulatory changes and shifting market preferences but is also acquiring a property that intrinsically appeals to the most stable and desirable corporate occupiers.

Disciplined Capital Redeployment

The acquisition marks the beginning of what OUE REIT's leadership calls its 'Phase 3' value creation journey. It represents a masterful act of capital recycling, following the trust's 2024 divestment of Lippo Plaza Shanghai, an older asset on a short leasehold in a more challenging market. The proceeds have been strategically redeployed into a brand-new, freehold trophy asset in a stable, high-growth market.

In a statement, Mr Han Khim Siew, Chief Executive Officer of the Manager, highlighted this strategic shift. "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," he said. The total acquisition cost of approximately A$201.2 million will be funded through a mix of debt and the proceeds from the Shanghai divestment, a prudent approach to financing growth. Post-acquisition, the REIT's aggregate leverage is expected to be a manageable 40.2%.

The move is a clear demonstration of disciplined capital allocation aimed at enhancing portfolio quality and delivering long-term value. By swapping an aging asset for a modern one, OUE REIT has improved its portfolio's overall age profile, leasehold tenure, and growth prospects.

Australia's Allure and Future Outlook

OUE REIT's expansion is underpinned by the macroeconomic stability and positive long-term outlook for Australia. The nation's economy is demonstrating resilience, supported by strong capital investment flows and favorable demographic tailwinds that are expected to drive office demand for years to come. Sydney, in particular, remains the focal point for offshore capital, accounting for over 60% of Australian office acquisitions in the past year, far exceeding its historical average.

This investor confidence is bolstered by a clear return-to-office momentum. Public transport data shows trips to the Sydney CBD have rebounded to over 90% of pre-pandemic levels, signaling a sustained demand for centralized, collaborative workspaces. While expanding its horizons, OUE REIT has emphasized that Singapore remains its core focus, accounting for approximately 94.9% of its portfolio value even after the acquisition. This positions the Sydney investment as a strategic and complementary diversification rather than a fundamental shift away from its home market.

As the global real estate landscape continues to evolve, the acquisition of a stake in Salesforce Tower serves as a blueprint for growth: identifying resilient markets, focusing on best-in-class assets with strong ESG credentials, and executing disciplined capital management to enhance unitholder returns.