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OUE Commercial Real Estate Investment Trust (OUE C-REIT) has inked a put and call option agreement with OUE Limited’s wholly-owned unit Alkas Realty to purchase the office components of OUE Downtown for a total of $908 million, according to an SGX filing on Monday (10 Sept).
OUE Downtown is a recently renovated mixed-use project in Singapore’s CBD. The landmark development consists of the 50-storey OUE Downtown 1 and the 37-storey OUE Downtown 2, along with a retail podium known as Downtown Gallery and a multi-storey car park. There is also a serviced residence at OUE Downtown 1 called Oakwood Premier OUE Singapore.
The properties being acquired consist of Strata Lot U4628V and Strata Lot U4629P, both under Town Subdivision 30, plus all machinery, plant, equipment and all parts of the said office components, but these exclude certain fixtures, furniture and equipment. Also not included in the sale are the multi-storey car park, the serviced residence and the retail podium.
“The purchase consideration had been negotiated on a willing-buyer and willing-seller basis, after taking into account the independent valuations of the properties by Savills and Colliers International,” said OUE.
The Business Times reported that the price translates to $1,713 psf, which is 2.0 percent and 3.9 percent lower than the respective valuations of Savills and Colliers. As of end-June, 95.1 percent of the office properties were rented out.
To partly fund the acquisition, OUE C-REIT plans to issue 1,288,438,981 new units to raise gross proceeds of around $587.5 million. The renounceable rights issue will be fully underwritten by joint lead managers OCBC and Credit Suisse.
Furthermore, OUE C-REIT plans to finance another $361.6 million by taking out loans. Taking into account acquisition-related fees and expenses, the overall transaction cost is estimated to hit $955.9 million.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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