Indonesian billionaire family hikes stake in Sydney’s tallest skyscraper with $607M inves…

Indonesian tycoon Mochtar Riady and his family are expanding their Australian investment by buying an additional 50% stake in Sydney’s tallest skyscraper in a deal valued at AUD864 million (US$607 million).

The Singapore-listed company OUE REIT, controlled by the Riady family, said in a recent statement that it would acquire the stake of the 263-meter Salesforce Tower from China’s Ping An Insurance, bringing its ownership to 69.9%.

The agreed price is 3.7% below what OUE REIT paid for its initial 19.9% stake, acquired from Mitsubishi Estate in March.

The company will fund the purchase with debt and proceeds from the recent sale of the Crowne Plaza hotel at Changi Airport.

"By redeploying the net cash proceeds from the divestment of Crowne Plaza Changi Airport into high-quality, future-ready properties, we continue to enhance portfolio quality while capturing opportunities across market cycles and geographies," Han Khim Siew, OUE REIT’s CEO, said in a statement.

The acquisition will increase the REIT’s portfolio value to SGD6.4 billion from SGD5.6 billion. It will also give OUE REIT greater management control of Salesforce Tower in Sydney’s central business district, enabling it to enhance the property’s value while securing stable income and exposure to the city’s prime office market.

After the deal closes, Australian properties will make up 17.6% of OUE REIT’s portfolio. Singapore will remain the group’s largest market, accounting for 82.4% of its properties.

"Singapore remains our core market, complemented by selective investments in Australia," Han said.

The purchase comes as OUE REIT considers selling one of its iconic Singapore properties. The company is in exclusive discussions to sell One Raffles Place, one of the tallest skyscrapers in the city-state’s central business district, to a consortium comprising Malaysia’s IOI Properties, led by tycoon Lee Yeow Seng, and Singapore state-linked real estate firm CapitaLand Investment, according to Forbes.

OUE REIT is a unit of Singapore-listed developer OUE, which is run by Mochtar’s son, Stephen. The family’s Lippo Group, with a net worth of $1.5 billion, has interests in real estate, retail, media, healthcare and education.