Merger of OUE Commercial REIT and OUE Hospitality Trust takes effect

The OUE Downtown building in Signapore’s central business district. Credit: Shenton WireThe OUE Downtown building in Signapore’s central business district. Credit: Shenton Wire

The merger of OUE Commercial REIT and OUE Hospitality Trust took effect Wednesday, creating a larger, more diversified Singapore REIT with assets of around S$6.9 billion, the two REITs said Wednesday.

The combined REIT will have seven properties in the office, retail and hospitality sectors, reducing concentration risk, the REITs said in a filing to SGX. The market capitalization will rise to around S$2.9 billion, it said.

“This makes the enlarged REIT one of the largest S-REITs and is expected to drive higher trading liquidity, which could potentially lead to a positive re-rating and a wider investor base,” the statement said, adding the increased debt headroom will allow for larger transactions.

In addition, the combined REIT has a broader investment mandate allowing acquisitions in the office, retail, hospitality and integrated development sectors, the statement said.

“We are grateful for the strong support we have received from unitholders, which shows that they likewise recognize the importance
of scale,” Tan Shu Lin, CEO of C-REIT’s manager, said in the statement. “With the completion of the merger, we look forward to having a larger platform that will not only be more relevant and resilient, but also able to better access competitive sources of capital,” she added.

Under the deal, OUE C-REIT acquired all of OUE H-Trust’s securities, with OUE H-Trust’s unitholders set to receive S$0.04075 in cash per unit and 1.3583 new OUE C-REIT units per unit.

The payment is expected on 9 September, with the new units to begin trading the same day, the filing said, adding the H-Trust units are set to be delisted on 17 September.

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