Singapore Land is buying 388 George Street in Sydney as Aussie office deals rebound
With office investment in Sydney’s central business district nearly doubling last year, SGX-listed UOL Group announced that it has completed its first transaction in the area, with the closing of an A$460 million ($285 million) acquisition from Canadian giant, Brookfield Asset Management.
The deal, which was signed in October 2024, gives the Singaporean developer a 50 percent stake in 388 George Street, a grade A office tower located along a busy pedestrian strip, through a joint venture with its Singapore Land subsidiary.
“We see great potential in this freehold commercial building as Sydney’s Central Business District is the heart of the city’s business and cultural activities. 388 George Street aligns with our strategy to expand our presence in Australia and strengthen recurring income streams, positioning the Group for sustained growth,” UOL chief investment officer Shirley Ng said.
UOL completed the deal after office transactions in Sydney’s central business district nearly doubled in 2024, reaching A$4.23 billion, according to MSCI data shared with Mingtiandi, from A$2.27 billion in 2023.
Upgraded and Fully Let
388 George Street is fully leased with its major office tenants including Australian financial firms QBE and Aware Super while its retail space is occupied by Louis Vuitton and Cartier’s Australian flagship store.
Refurbished in 2020 at a cost of A$200 million, the commercial tower offers 403,800 square feet (37,444 square meters) of office space and 39,300 square feet (3,654 square meters) of retail accommodation. As of the end of September 2024, it has a weighted average lease expiry by income of approximately 6.2 years.
UOL Group chairman Wee Ee Lim
At the stated compensation, UOL paid A$2,080 per square foot for the property.
With the completion of the transaction, UOL Group becomes a co-owner of the 1982-vintage property, with Investa Gateway Offices fund (IGO) partners, Oxford Properties Group and Link Asset Management, owning the other half and managing the asset.
Asian Investors Advance
As Singapore investors play a growing role in Australia’s commercial real estate market, 388 George Street is UOL’s seventh property in the country and forms part of what the company calls its long-term growth strategy Down Under.
A week before UOL announced its agreement to invest in 388 George Street, SGX-listed Metro Group revealed that it had partnered with Sim Lian Group to buy 1 Castlereagh Street in Sydney’s central business district.
Those September investments came after Singapore’s Keppel REIT said in April that it would pay A$363.8 million to acquire a 50 percent stake in 255 George Street, an office tower around 550 metres (601 yards) from UOL’s later target, from a fund managed by Mirvac.
“Demand for office space in Sydney has somewhat reached a point of post-COVID stability, and the market has shown evidence of significant repricing. These factors, combined with Sydney’s resilience as an office market, makes Sydney an attractive office market,” said Lynette Ng, a senior associate in Asia real assets research at MSCI.
Washington-based research organization Urban Land Institute’s (ULI) latest Asia Pacific survey ranked Sydney as the third-best city for investment prospects in Asia Pacific this year, behind Tokyo and Osaka. Sydney was also ranked second for most likely to see office rental growth in 2025, trailing only Tokyo.
Luke Billiau, head of capital markets for Australia & New Zealand at JLL, told Mingtiandi that the consultancy’s conversations with investors have affirmed that liquidity is returning to the office sector in core Australian markets, with Asian investors playing a central role.
“Generally speaking, the Sydney CBD office market has largely adjusted to the higher cost of capital and the softening to investment hurdles experienced will abate before a period of stabilisation in 2025. The majority of capital that is investing and underwriting the market is originating offshore, primarily Singapore and Japan.”
Note: this story has been updated to show that UOL Group co-owns 388 George Street with Investa Gateway Offices fund (IGO) partners, Oxford Properties Group and Link Asset Management. An earlier version attributed the ownership to Investa. Mingtiandi regrets the error.