After successfully leasing Salesforce Tower, Mitsubishi Estate Asia (MEA) is moving to sell its 30% stake in Sydney’s tallest office building amid resurging interest in premium office investment opportunities.

CBRE’s Flint Davidson and Stuart McCann have been appointed to steer the International Expressions of Interest campaign for the 180 George Street skyscraper, Sydney’s most recently completed premium grade office building.

The divestment aligns with MEA’s global capital recycling strategy and will allow the group to reinvest in further growth projects across Australia. 

MEA’s Head of Australia Yuzo Nishiyama said, “Selling our stake in Salesforce Tower signifies an important milestone for MEA, marking our first divestment in Australia. We have been involved throughout the entire journey of developing this iconic building and it has been tremendously successful for us, with thanks to our partners Lendlease and Ping An Real Estate.”

“This divestment bolsters MEA’s strategic expansion in Australia, where we continue to participate in more development projects across our real estate sectors of focus, including living, office and industrial.  Our conviction for premium grade office development opportunities in the superior locations remains very high as evidenced by our Parkline Place over-station development in the Sydney CBD, which will complete in September this year,” Mr Nishiyama added.

The architecturally renowned 180 George Street is the centrepiece of Sydney Place, a Circular Quay precinct largely developed by Lendlease and MEA. 

The precinct will benefit from more than $10 billion in private investment, including the Sydney Waldorf Astoria Hotel and One Circular Quay, one of the city’s most luxurious residential towers, with both these projects due to complete in 2026.

The precinct will also benefit from significant public infrastructure spending – including the Light Rail, Metro and Circular Quay upgrades.

The distinctive 263 metre Salesforce Tower comprises 53 office floors (totalling 59,916sqm), a ground floor lobby and retail plaza (1,996sqm), and two levels of basement car parking. 

An exemplar in placemaking and connectivity, 180 George Street has attracted a multitude of high-profile tenants including global tech-leader Salesforce, JLL, and The Executive Centre, providing a WALE of circa 6.9 years and an occupancy rate of 99%.

The MEA sale plans coincide with heightened domestic and international investor interest in the Australian office market, with $4.2 billion in assets traded in H1 2024, up 48.1% on the previous corresponding period.

Stuart McCann, CBRE’s Head of International Capital and Capital Advisors, Pacific and Southeast Asia, noted, “International interest in the Australian office market, particularly the Sydney CBD, has noticeably improved in the last quarter. This is being driven by a combination of genuine value emerging, with pricing reverting 20%-30% from the peak, together with continued strong leasing performance. Australia’s office sector now looks to represent the best value in the Asia Pacific region.” 

Flint Davidson, CBRE’s Head of Capital Markets Pacific, added, “180 George Street is Sydney’s newest premium grade tower and has been built with the future of office in mind. With the expectation that the newest and best assets will continue to outperform, together with a constrained future supply pipeline, we expect capital will see this as a compelling opportunity to get set in the CBD core.”  

180 George Street is jointly owned by the Lendlease-managed APPF Commercial, which has a 20 per cent stake, and Ping An Real Estate, which holds a 50 per cent stake.

 It has been designed to support next-generation working, featuring premium end-of trip facilities, a new community building with a public bike hub, a public plaza directly accessible from George Street, and a thriving network of city laneways playing host to a diverse mix of food and beverage retailers, including the landmark Jacksons on George bar and bistro.

Designed by Foster + Partners in collaboration with Architectus, the building has a perimeter structural frame which maximises views of Sydney Harbour, enhances natural light and eliminates centralised columns for flexible interior layouts.

It also benefits from future proofed technology, offering a Platinum WiredScore - the highest technological certification for buildings - and was the first Sydney building to achieve SmartScore Platinum status. 

International Expressions of Interest close Thursday, 26 September 2024.

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