• Asset: Salesforce Tower, 180 George Street, Sydney (Circular Quay end of the CBD), part of the Sydney Place precinct
• Interest sold: 50 per cent
• Price: about $864 million, made up of roughly $461.4 million in cash plus a share of existing debt
• Implied whole-building value: about $1.73 billion
• Capitalisation rate: 5.75 per cent
• Buyer: OUE REIT, listed in Singapore
• Seller: Ping An Real Estate, the property arm of Chinese insurer Ping An
• Agents: Colliers' Adam Woodward and JLL's Luke Billiau
• OUE REIT stake after settlement: 69.9 per cent
• Condition: FIRB approval

Salesforce Tower rises 263 metres over 55 levels at the northern end of George Street, close to Circular Quay. It was designed by Foster + Partners with Architectus and completed in November 2022. The building offers about 61,915 square metres of lettable area, almost all of it office, with a small retail component.

The holding also takes in Jacksons on George, a separate four-storey building of bars and dining that sits within the Sydney Place precinct. Together they give the site a mix of premium workspace, hospitality and public space that few CBD addresses can match.

The tower carries a six-star Green Star rating, a Platinum WELL rating and a 5.0-star NABERS energy rating. Those credentials matter more every year as large corporate tenants set their own emissions targets and screen out buildings that cannot help them meet them.

Salesforce is the naming-rights anchor. Other tenants include TikTok, JLL, Bain & Company, Accenture, Wellington Management and The Executive Centre. Occupancy reached 100 per cent at the end of September, up from 99.2 per cent at the end of 2025.

The weighted average lease expiry sits at 4.8 years by gross rental income. The largest block of expiries before 2030 is about 15.4 per cent of the lettable area, due in 2028, while close to 79 per cent of the space runs beyond that point. Technology, media and telecommunications tenants account for about 71 per cent of the rent roll, which is a concentration a buyer has to be comfortable with.

Once the deal completes, Salesforce becomes OUE REIT's largest single tenant, contributing about 14 per cent of its commercial income.

The tower's ownership has been reshuffled several times since the project was assembled. Ping An took its 50 per cent interest in 2016, alongside Mitsubishi Estate and Lendlease, several years before construction began. Lendlease sold down part of its holding in 2022 while the tower was still being built, at a time when the project was assumed to be worth about $2.2 billion.

OUE REIT first bought in earlier this year, paying $357.2 million for a 19.9 per cent stake from Mitsubishi Estate in a deal announced in February and completed in March. That price implied about $1.795 billion for the whole building. Pre-emptive rights came with that stake, which is how OUE REIT was able to step in when Ping An moved to sell.

Ping An notified its co-owners of the proposed sale in July. OUE REIT accepted its pro-rata share on 12 October and took up the shortfall on 22 October, before confirming the arrangement publicly the next day. After settlement Lendlease's Australian Prime Property Fund Commercial will hold 20 per cent, with the remaining 10 per cent split between Japanese-linked investors including Odakyu Electric Railway and MEC Global Partners Asia.

For OUE REIT, the attraction is control. Moving from a minority to a 69.9 per cent interest gives it the decisive say over leasing, capital works and any future sale of a building that is full, new and close to the harbour. Australia's share of the REIT's portfolio by value jumps from under 6 per cent to almost 18 per cent.

The deal is being funded through new borrowings plus part of the proceeds from selling the Crowne Plaza Changi Airport hotel in Singapore for S$500 million. The manager has flagged that its gearing will rise to about 45 per cent on a pro forma basis and that it could issue perpetual securities to bring that back down. It describes the deal as accretive to distributions on a pro forma basis for the first half of 2026.

The price is also a little sharper than OUE REIT paid in February. The implied value of about $1.73 billion sits roughly 3.7 per cent below the February figure. Knight Frank valued the 50 per cent interest at $864 million as at 30 September, so the deal has landed on book value.

Ping An has been working towards this sale for some time. Reports indicate it appointed brokers as early as 2023, well before the current lift in Sydney office sentiment. The tower was Ping An's first commercial property investment in Australia.

Chinese institutional investors have been net sellers of offshore real estate for several years, often for reasons that have more to do with conditions at home than with the asset itself. Exiting through a pre-emptive process to an existing co-owner gives certainty of execution and avoids a long public campaign, even if it limits the field of buyers.

The Salesforce Tower trade adds to a run of large Sydney CBD office transactions this year:

• 5 Martin Place: a half stake sold for $394 million at a 5.75 per cent yield, implying $788 million for the building
• 1 Market Street: sold by an Investa-managed fund for $450 million in August to a partnership reported to be backed by GIC
• 680 George Street and 50 Goulburn Street: Centuria settled a $454 million purchase of a 50 per cent stake from Brookfield in August
• O'Connell precinct: Charter Hall agreed in May to take over Lendlease's half after paying $500 million for ADIA's 50 per cent stake earlier in the year

The common thread is that offshore capital and large domestic managers are again willing to commit serious money to well-located Sydney towers, with 5.75 per cent emerging as a reference yield for prime CBD stock.

The timing lines up with improving fundamentals. Cushman & Wakefield data shows central Sydney office vacancy fell to 13.3 per cent in the third quarter, with premium-grade vacancy down to 7.7 per cent. Prime net effective rents are reported to be up about 6.5 per cent over the year.

Supply is also tight. The Property Council recorded no new CBD supply in the six months to July, while JLL expects no completions in 2026 and only three in 2027: Chifley South, 55 Pitt Street and Atlassian Central. After that the next meaningful wave is not expected until about 2030. That leaves existing new-generation towers like 180 George Street with real pricing power.

The flip side is the widening gap between the best buildings and everything else. JLL puts premium-grade occupancy in the low 90s while Grade A sits closer to 84 per cent. Investors are paying up for the top tier and staying selective about the rest.

• Credentials sell: sustainability ratings, wellness certification and an anchor tenant gave buyers confidence to pay near book value.
• Know your co-ownership agreement: pre-emptive rights shaped this entire sale process and decided who could buy.
• The story matters as much as the numbers: a clear precinct narrative around Circular Quay, hospitality and public space helps an asset stand apart from older stock.
• Tenant concentration needs explaining: a heavy tech weighting is fine when the covenant is strong, but it has to be presented upfront in the information memorandum.
• Timing a campaign is a strategic call: Ping An started early and waited for the market to firm before executing.

The immediate milestone is FIRB approval, which will decide when the deal settles. Watch too for any move by OUE REIT on capital management, including the perpetual securities issue it has flagged and the outcome of its separate talks over One Raffles Place in Singapore.

Further out, the 2028 lease expiries will be the first big test of the tower's leasing strength under majority OUE ownership. The remaining 30 per cent held by Lendlease's fund and the Japanese investors is also worth watching. OUE REIT has said its pre-emptive rights could be a source of future acquisitions, so Salesforce Tower may not have changed hands for the last time.